28 NOVEMBER 2001

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British holiday firm hit hard

Britain's biggest holiday firm, Airtours Plc reported a 57 percent rise in annual operating profits yesterday but warned investors its outlook was uncertain and confirmed it had cut 1,600 jobs since 11 September.

The news is yet another indication of the problems that the tourism industry is experiencing worldwide in the aftermath of the terrorist attacks in the US. Most of the job cuts in Airtours plc, which acquired the flagging German company, Frosh Touristik International, have taken place in the US, the UK and Germany.

Airtours company in Malta, represented by Edrichton Holidays, refused to comment yesterday on whether their own staffing levels had been reduced.

The British company, which owns the Going Places travel agencies and the Airtours airline, said although growth this year will be challenging, it expects trade in the current year to be in line with last year and sees growth only returning for 2003.

The group, which is to change its name to MyTravel Group Plc, reported operating profits before e-commerce, exceptional items and goodwill of 147.4 million pounds ($209 million) for the year to 30 September, slightly above analysts' forecasts of 140-145 million pounds.

Actual annual pre-tax profits fell sharply to 81.3 million pounds after 211.4 million pounds, following the sale of its share in cruise ship operator Costa Crociere and the acquisition of loss-making FTi.

Airtours shares dipped two pence to 230p by 8.35 GMT.

"It is early days, but we are planning this current year to trade in line with last year," said Chief Executive Tim Byrne.

He added the group had cut 1,600 jobs since 11 September, more than half in the United States, some 200 in the UK, and the rest in Scandinavia and Germany. This brings the group's worldwide number of employees down to 27,000.

Chairman David Crossland said winter 2001/2002 bookings were currently down eight percent in a season it was selling 15 percent fewer holidays, but he hoped the summer 2002 season would show a bounce back.

"Although the outlook for the leisure travel industry this year is uncertain, and in the light of our record performance, growth this year will be challenging," he said.

The disruptions to its trading after 11 September attacks on the United States forced the group to make an exceptional cost of 11.4 million pounds to repatriate stranded customers.

The group said, however, there would be no extra costs for the change of the company name to MyTravel Group.



The Business Times, Network House, Vjal ir-Rihan San Gwann SGN 07
Tel: (356) 382741-3, 382745-6 | Fax: (356) 385075 | e-mail: editorial@networkpublications.com.mt