MyTravel sails into a £911m loss

Struggling holiday firm MyTravel, formerly Airtours, reported overall losses of £911 million following a worse than expected trading year.

In the year to September 30, the tour operator unveiled an operating loss of £358 million and a £359 million write-off of key assets that contributed to an exception items total of £473 million.

The Chief Executive of MyTravel Group, Peter McHugh, said: “2003 has been an extremely poor year for MyTravel, resulting in an operating loss of £358.3 million before exceptional items and goodwill."

The firm attributed the disappointing result to a combination of factors, but a significant proportion of the operating loss was due to a legacy and one-off aquisitions and asset write-downs.

MyTravel also pointed to "structural issues" that prevented appropriate responses to an "extremely tough trading environment" and "poor management information systems" that had exacerbated problems.

Mr McHugh said: “During the year, we formulated a strategic plan which identified actions which had to be achieved to turn around the business – reducing the proportion of fixed costs, improving utilisation of assets and restructuring the UK charter and distribution business. We are vigorously implementing these actions."

However, he admitted that it was clear that the company had "significantly under-estimated" the extent of major UK restructuring issues and that the scale of the turnaround required was larger than originally envisaged.

MyTravel's Chief Executive that the company had made "significant progress" and was ahead of schedule on delivering cost savings of £150 million in 2005.

He added: “Bookings for winter 2003/04 are currently in line with our expectations, with margins improved over the prior year. Bookings for summer 2004 are currently down on the prior year but in line with the rest of the industry. Summer margins are better than the prior year."

However, Mr HcHugh said that although the Group faced significant challenges, which would take time to overcome, he was confident that a turnaround could be achieved with "a return to profitability in 2005".

(SP)