MyTravel - News

Thought you might all like to reflect on MyTravel's year - source Travel Weekly :-)

LEGER OPTS FOR £22.2 MILLION BUYOUT FROM MYTRAVEL

02 Jan 2003 16:35 GMT

THE management of Leger Holidays has confirmed the £22.2 million buyout of Leger from MyTravel.
Led by Leger managing director Ian Henry, the buyout was backed by venture capital firm 3i who originally invested in Leger in 1993 before it was sold to MyTravel in 2000 for £23.1 million.
Leger's parent company Sunway Travel is based in Rotherham and employs 130 people.
Henry said: "We are delighted to have the business back under our ownership and control."
MyTravel said the deal would cut £16.5 million from its debt, which stood at £130 million last month.
The sale comes less than three weeks after MyTravel won an extension to a £250 million credit facility with its banks, after running up full-year losses of £72.8 million.


MYTRAVEL'S AVIATION CHIEF EXECUTIVE RESIGNS

13 Jan 2003 15:13 GMT

MYTRAVEL has suffered another senior level loss after aviation chief executive Mike Lee said he was quitting the company.
Lee will leave MyTravel following the company's annual general meeting on March 20 after his aviation role was made redundant.
The aviation division is set to be merged with MyTravel Airways after the AGM.
Lee joined the company in 1990 and was put in charge of its aviation interests in 1997.
In the past three months the company has seen chief executive Tim Byrne, finance director David Jardine and global development chief executive Richard Carrick depart.


'FOR SALE' HANGS OVER MYTRAVEL'S CRESTA

15 Jan 2003 12:28 GMT

MYTRAVEL has confirmed it has put one of its specialist businesses up for sale.
Industry speculation points to short-breaks operator Cresta, although the spokeswoman refused to reveal its identity.
She said talks were progressing with a number of interested third parties, and said the move was part of MyTravel’s strategic plans announced in November.
Possible buyers could include First Choice, ebookers and lastminute.com – all of whom have expressed an interest in Cresta.
In December First Choice chief executive Peter Long said Cresta was not “of strategic importance”, but admitted it would be interested if it, or Bridge, were up for sale.
Ever since MyTravel announced its profits warning, observers have been watching which parts of the business the operator would be looking to sell.
In December MyTravel sold coach operator Leger Holidays to a 3i-backed management buyout for £22.2 million.


MYTRAVEL TO SELL CRESTA

17 Jan 2003 12:46 GMT
MYTRAVEL is banking on a quick sale of Cresta - its ‘crown jewel’ - and is poised to put further businesses up for sale within weeks amid claims it has fallen behind on bank payments.
It will be the third sale since October when Eurosites was bought by Holidaybreak, followed by a management buyout of coach operation Leger in December.
News Cresta was up for sale is said to have come as a “complete shock” to managing director Steve Kimber, who was himself tipped to be involved in a management buyout.
Cresta, the UK’s largest short-break operator, is thought to be worth between £40 million and £70 million. Set up in 1968, it has 645 staff, carries 470,000 passengers and has a £150 million turnover.
A total of 22 companies have been sent information, while a further two “credible organisations” are also interested. The most likely bidders are TUI UK, First Choice, Lastminute.com and Ebookers. Two private bids backed by venture capital firms HG Capital and 3i are also high on the list.
Sources warned MyTravel was struggling despite a vote of confidence from banks in November - when it posted a pre-tax loss of £72.8 million - and the securing of an extension of its £250 million overdraft facility to the end of 2003. At the time, analysts predicted MyTravel’s debt could be as high as £3 billion.


GOING PLACES TO RACK TUI AFTER 10 YEARS

31 Jan 2003 12:11 GMT

MYTRAVEL is poised to drop active support for First Choice or Thomas Cook through Going Places after a deal to sell TUI products for the first time in a decade.
The commercial agreement ends the public feud between the two companies, triggered when Lunn Poly put MyTravel products off sale after Airtours’ advertising campaign six months ago.
It means both group’s products will be actively promoted in each other’s shops, with racking and window promotions.


MYTRAVEL POISED TO CUT 700 JOBS IN UK

04 Feb 2003 11:57 GMT

MYTRAVEL has said it may have to cut 700 jobs in the UK to reduce costs.
The crisis-ridden tour operator employs 15,000 people in the UK and 27,000 staff worldwide.
MyTravel has entered into an initial one-month consultation period with employees affected in underperforming areas of the business.
The cuts are part of a full-scale business review announced at the end of last year, and a reaction to tough trading conditions.
A spokesman said MyTravel was looking to make cost-savings in head office administration and accounting divisions.
“This is not an attack on front-line staff,” he said. “We want to keep our customer presence on the high street.”


AXE SWINGING OVER MYTRAVEL JOBS

07 Feb 2003 10:47 GMT

SPECULATION is rising as to how costs will be slashed at MyTravel with news that 700 jobs could go in the UK.
As fears rise among the UK’s 15,000-strong workforce, staff at MyTravel’s under-performing businesses are being consulted to suggest cost savings, with redundancies most likely at head office.
Capacity cuts are planned within the charter operations, which could lead to reduced regional flights, shifting aircraft overseas or taking them out of action completely.
The latest announcement comes as a reaction to tough trading created by a potential war, a loss of £72.8 million announced in November, and a poor January.


"UNACCEPTABLE": CROSSLAND ON MYTRAVEL

20 Feb 2003 11:50 GMT

MYTRAVEL chairman David Crossland has described the company's performance in 2002 as "unacceptable".
In its annual report, Crossland said difficult trading conditions, a poor performance in the UK and accounting problems led MyTravel to experience "the worst year in its history".
However, the report failed to reveal the pay-offs given to former chief executive Tim Byrne and finance director David Jardine.
Despite the company's performance, Byrne and Jardine still pocked £688,000 and £506,000 respectively.


CROSSLAND STEPS DOWN AS MYTRAVEL CHIEF

28 Feb 2003 10:07 GMT

MyTravel's David Crossland has bowed out of the company he founded and cut short his extended stay as chairman.
Crossland was originally planning to retire last November but scrapped his plans in October to help the beleaguered MyTravel get through its worse ever financial crisis.
The company gave no explanation for his retirement.
Crossland said: "This was a difficult decision and it is a sad day for me after 40 years in the travel industry. However, I leave MyTravel in excellent hands."
Crossland founded the company over 30 years ago and saw his small agency grow into a huge public company.
Current deputy chairman Eric Sanderson will succeed him with immediate affect.


SPOTLIGHT FALLS ON MYTRAVEL

14 Mar 2003 11:36 GMT

MYTRAVEL has started scaling down its retail division by shedding senior Going Places staff ahead of next week’s annual general meeting.
Sources said morale has hit an all-time low following the departure of several senior staff. Going Places operations director Liz Davies and head of commercial Martin Andrew are among the high-profile names negotiating their exit.
Around 90 staff at Holiday House in Rochdale face the axe and whole departments will be cut to the bone, including a training division which will be slashed from 50 to two.
“People are distraught because many long-standing staff are under threat. The atmosphere at Holiday House is dire,” said one source.
A MyTravel spokeswoman confirmed consultation at a senior level. “We are doing it as compassionately as we can and by the book,” she said.


MYTRAVEL BOOKINGS 'DETERIORATED' IN RECENT WEEKS

20 Mar 2003 11:13 GMT

BOOKINGS for MyTravel have “deteriorated” in the past couple of weeks, according to chief executive Peter McHugh.
Speaking at the Group’s Annual General Meeting in Manchester, McHugh said: “With the Iraq crisis developing on a daily basis, this is clearly a very difficult time for the industry. However, the board are taking the necessary actions to respond to the situation.”
Despite market conditions, Group winter bookings are 4% behind last year, with UK winter bookings 7% down on last year – both in line with capacity cuts.
Summer bookings for the Group are 3% ahead of last year on an 8% reduction in capacity, while UK summer bookings are up 7% on last year on an 11% reduction in capacity.
As a result of capacity cuts, there are half a million fewer holidays in the UK to sell than at this time last year.


MYTRAVEL DENIES "SIGNIFICANT" SHOP CLOSURES

20 Mar 2003 11:38 GMT

MYTRAVEL said it has no plans for “significant” shop closures, but admits it has to reduce fixed costs.
As part of its strategic review update at today’s Annual General Meeting, MyTravel said its increased fixed cost base – aircraft, cruise ships, hotels and retail stores – had “reduced its flexibility to respond in a fragile economic environment”.
“We have no plans for significant retail store closures. The size of our retail estate is not static, we do however recognise that our retail outlets are the route to our customers.”
Meanwhile, MyTravel intends to make a claim for damages against the European Commission for blocking its bid to buy First Choice in 1999.
The claim is likely to be “substantial”, although an outcome is not expected for a couple of years.


MORE JOB CUTS AT MYTRAVEL

28 Mar 2003 14:21 GMT

MYTRAVEL is making a raft of redundancies today following a wholesale review of its retail network.
The company refused to put a figure on the number of shop staff leaving, but a spokeswoman confirmed the cuts would form part of the 700 redundancies already announced.
Sources put the number of jobs to have come out of the UK business since Christmas at 1000, including natural wastage and job shares.
The review, conducted on a shop-by-shop basis, considered the profitability of each outlet before deciding on the total cuts required.
Regional managers were briefed on Wednesday about the number of jobs to go, though the final decision on who loses out will be made by individual shop managers today.
MyTravel distribution and charter tour operations managing director Steve Endacott said: "These cuts are painful and difficult but the measures are necessary if we are to have a cost base which allows us to move forward on a sound financial basis."
"There are no plans for wholesale shop closures although the shop portfolio is always in a state of flux."
MyTravel is rumoured to have rejected approaches from rivals including Cosmos and Global Travel Group about buying up Going Places shops.


MYTRAVEL'S COOPER TAKES FTO ROLE

01 Apr 2003 16:43 GMT

MYTRAVEL head of legal services Andrew Cooper is to replace Alan Flook as director general of the International Federation of Tour Operators and Federation of Tour Operators.
Cooper is already on the FTO board and is chairman of the federation’s health and safety committee.
Flook is retiring in June after 26 years in the role.


MYTRAVEL SHOP STAFF TO GO

04 Apr 2003 12:05 GMT

MYTRAVEL has confirmed hundreds of shop staff will be axed as part of its ongoing redundancy programme.
The redundancies will mainly be "meeters and greeters" and administration staff but some front-line travel agents at Going Places and Travelworld will also go.
These are part of up to 700 redundancies already announced by the company, which also revealed that up to 10 shops will close.
Meanwhile, there is a further redundancy programme for up to 1,300 jobs worldwide. The MyTravel group expects another 500 positions to be lost through natural wastage in the next 18 months.


MYTRAVEL SELLS FOREIGN EXCHANGE FOR £20 MILLION

04 Apr 2003 13:19 GMT

THE MyTravel Group has sold its foreign exchange business to Travelex for £20.8 million.
The group has entered into an agreement with Travelex to allow MyTravel Financial Services to carry on supplying foreign exchange to its travel agency shops for a maximum of 10 years.
The total consideration is £20.8 million, of which £8 million relates to the sale of MTFS and the balance of £12.8 million relates to an upfront rebate payment under the agreement, which was paid in cash at completion.
The news follows the group's recent meeting with its 27 banks, warning of further job cuts worldwide, and its recent decision to take short-break operator Cresta off sale because offer prices were not high enough.


MYTRAVEL APPOINTS TWO NON-EXEC DIRECTORS

14 Apr 2003 17:16 GMT

MYTRAVEL has appointed former Thomson Travel Group chief executive officer Roger Burnell and ex-Barclays Bank finance director David Allvey as non-executive directors.
Burnell spent 25 years with Thomson Travel Group (now TUI UK) and has substantial experience of the vertically-integrated tour operating industry.
Burnell is also a non-executive chairman of International Life Leisure Group and non-executive chairman of The First Resort.
In a move to reassure shareholders there will be no more accounting issues, Allvey will become chairman of the audit committee.
He was finance director of Barclays Bank until December 2000 and is currently a non-executive director of the UK Accounting Standards Board.


MYTRAVEL MAKES LIGHT OF CAA 'INTEREST'

22 Apr 2003 11:32 GMT

MYTRAVEL is holding regular talks with the Civil Aviation Authority but says there is "no reason" to doubt its survival despite further speculation on its fate.
The travel giant's finances are under the spotlight again following news the CAA has held discussions with secretary of state for transport Alistair Darling on MyTravel's affairs.
A MyTravel spokeswoman said: "There is no reason why we should not survive the summer. It is a difficult trading environment but we are holding our own.
"Yes we are talking to the CAA and maintaining regular dialogue to keep them informed on our situation. We are fully bonded and licence remains in tact."


SIGNS OF RIFT BETWEEN MYTRAVEL AND FIRST CHOICE

25 Apr 2003 10:43 GMT

By Juliet Dennis

TOP-LEVEL emergency talks have been held between MyTravel and First Choice over joint commercial arrangements amid signs of a growing rift.
First Choice managing director for UK and Ireland Dermot Blastland and MD UK distribution John Wimbleton met MyTravel UK distribution and charter tour operations MD Steve Endacott last Thursday.
Talks were demanded by MyTravel, which admitted the worst-case scenario could be an end to their working relationship and sales bans on each other’s products.
Endacott said: “We have concerns about our commercial relationship with First Choice. I’m happy with sales via Lunn Poly and Thomas Cook but not Travel Choice.”
It is believed First Choice sales through Going Places shops have risen following MyTravel’s bid to reduce in-house sales and Endacott could be seeking more favourable terms.
Blastland said: “Commercial terms need renewing for next winter’s sales and beyond.”


MYTRAVEL PUSHES LATES

01 May 2003 13:17 GMT

GOING Places staff are being urged to look beyond the "traditional" lates customer in its new lates campaign which is targeting increased third-party sales.
The campaign, which launches this weekend with national newspaper advertising and includes shop window posters and direct mail-outs, encourages agents not just to think of lates customers as those who book within two weeks of departure or always buying on price.
MyTravel research shows 17% of customers book within two weeks, while 31% book within two to six months of departure.
The campaign uses a handwritten-style font to stand out from other advertising and because customers respond better because offers look "last minute".
At a series of UK roadshows agents are being told to push products of partners Thomson and Thomas Cook and specialists in the campaign, which offers to beat any late deal by £20.


MYTRAVEL ASKS BANKS FOR 2006 CREDIT EXTENSION

02 May 2003 09:38 GMT

By Louise Longman

MYTRAVEL is working with its lenders to agree a “proposed extension” of its credit facilities until May 2006.
In a trading update, beleaguered MyTravel said proposals for the refinancing have been put to the lending group, with “good progress being made”.
Summer bookings are down 3% on last year on a 10% capacity reduction, while winter bookings are 4% down, in line with capacity cuts.
In April MyTravel’s summer 2003 bookings were 3% ahead on a 12% reduction in capacity.
This leaves MyTravel with 500,000 holidays left to sell for summer – approximately 40% of its capacity.
Chief executive Peter McHugh said bookings over the last two weeks “have been encouraging”.


MYTRAVEL SAYS IT'S 'HERE FOR THE LONG TERM'

09 May 2003 10:58 GMT By Juliet Dennis

MYTRAVEL has pledged it is “here for the long term” in a bid to restore the trade’s faith in its future and silence critics.
MyTravel UK and Ireland chief executive Duncan Wilson insisted the company was out of the woods as plans were laid to extend credit facilities until 2006.
Wilson stressed the future was secure thanks to a new approach and strategic review.
“The last six months have not been easy and we’ve been through a horrific winter. But we’re here for the long term.
“We’ve gone through a cultural change - we have no interest in having the biggest market share.”
The sea-change approach led to the push for early summer 2003 sales and will continue for 2004 as MyTravel reaffirms it has no interest in being the lates market leader.



MYTRAVEL ANNOUNCES INTERIMS

06 Jun 2003 09:41 GMT

THE MYTRAVEL Group has posted a pre-tax loss of £617.9 million in its half-year results.
The group blamed the war in Iraq and uncertainty about the company’s finances for its poor trading performance during the six months ended March 31, 2003. Underlying UK trading was £87.1 million worse than a year ago on a capacity cut of 12%.
Meanwhile, the group has agreed a £1.13 billion refinancing deal with its banks up to May 2006 and is confident it will soon complete the refinancing of its convertible bonds.
Chief executive Peter McHugh is relatively upbeat about the rest of the summer. "Recent booking trends are generally encouraging, however we cannot yet predict whether this trend will continue or how the peak summer period will unfold.
If current trends do continue, then I expect the summer performance to be better than last year. However, we do not expect to fully recover the operating losses suffered in the first half.”


BETTER LATES THAN EVER?

13 Jun 2003 09:19 GMT

A WAR of words has broken out between MyTravel and TUI UK over the relative merits of their lates strategies.
TUI UK managing director Chris Mottershead claimed MyTravel's decision to sell prime stock early at "giveaway prices" had given TUI an open goal in the lates market.
Mottershead said prices for Thomson holidays sold through Lunn Poly are £100 ahead of rivals because it has more prime stock, including Saturday departures, than competitors. He added the summer would be "almost banked" within two weeks.
But MyTravel UK and Ireland chief executive Duncan Wilson hit back, saying TUI's was a high-risk strategy that left it vulnerable to international events such as the war and SARS.
"As a more risk-averse business we want less prime stock in the peak season," he said.
Cosmos commercial director Stuart Jackson said sales across the industry are steadily improving, with margins up on last year, but the position would be healthier if Thomson had cut capacity.
"It's caused a problem because they have more to sell. Prices are fairly good but they would be about £10 higher," he said.
The spat came after TUI northern Europe chief executive Peter Rothwell told Institute of Travel and Tourism conference delegates he had "no idea" where MyTravel's interim £617 million pre-tax loss had come from.
Wilson agreed the losses were not representative of the industry and blamed the Iraq war and the group's financial uncertainty, which he claimed helped boost rivals' sales. "Our performance was terrible," he said.


MYTRAVEL TO SUE EC FOR £518M

19 Jun 2003 19:17 GMT

MYTRAVEL has confirmed it is suing the European Commission for £518 million.
Group chief executive Peter McHugh announced last year of his intention to sue the EC after the European Court of Justice ruled that the Commission acted unlawfully in blocking the attempted takeover by MyTravel, then Airtours, of First Choice Holidays in 1999.
A MyTravel spokeswoman confirmed the lawsuit was going ahead.


MYTRAVEL STAKE ON OFFER TO BONDHOLDERS

21 Jul 2003 14:09 GMT

MYTRAVEL is discussing offering a 20% stake in the company to bondholders as part of its negotiations to secure £220 million worth of convertible bonds by September.
Also under discussion is to extend the maturity of the bonds by three years to January 2007, a possible increase in the rate of interest payable on the bonds, and a "success fee" based on the percentage in the company's market capitalisation.
The company confirmed it remained confident in securing the deal within the agreed timescale. In April it announced it had successfully negotiated a £1.3 billion refinancing deal.



MYTRAVEL LOOKS FOR US BUYER

30 Jul 2003 15:50 GMT

MYTRAVEL has put its entire US operation on the market in a move to further reduce its mountain of debt.
The sell-off comes as the operator revealed the disposal of its 70-apartment Oasis Lakes timeshare accommodation in Florida for £12.7 million.
It is believed documents detailing financial data on its US businesses have already been circulated to possible bidders, who have 10 days to make indicative offers.
Sources said the company could raise more than £185 million, largely through the sale of Travel Services International, a Florida-based operation with interests in cruise, hotel, flights and car rental market. MyTravel paid £240 million for TSI in 2000.
The operator declined to comment.


MYTRAVEL TO REFINANCE £221.6M OF CONVERTIBLE BONDS

01 Aug 2003 16:48 GMT

THE MYTRAVEL Group has reached a deal in principle with its bondholders to refinance £221.6 million of convertible bonds, but has downgraded forecasts for this summer.
The deal has to be put formally to bondholders for approval at a meeting scheduled to take place in the new few weeks, followed by agreement from the banks.
The deal extends the maturity of the bonds by three years to January 2007, gives bondholders a 26% stake in the existing share capital, increases the rate of interest on the bonds from 5.75% per year to 7% and introduces a success fee based on the percentage increase in the company's market capitalisation.
The company remains confident the deal will be in place by the September 30 deadline.

Meanwhile, MyTravel’s prediction it would perform better this summer than last year has been revised. It now believes operating profit for the second half of its financial year - covering the peak summer period - will be level with last year.
The company said margins for this summer had not improved as much as had been expected. This was blamed on the pricing of brochures last year, with prices lower than they should have been, cost controls in the UK airline and difficult market conditions in Scandinavia and North America.


MYTRAVEL CHEERED BY BOND NEWS

18 Aug 2003 15:21 GMT

MYTRAVEL has sent out a formal proposal to bondholders to extend the maturity of its £221.6 million convertible bonds.
Bondholders have been sent letters to finalise the deal to extend the repayment of the bonds by three years to January 2007 ahead of their meeting on September 15.
The deal - already agreed "in principle" at the start of this month - will give bondholders a 26% stake in the company's existing share capital.
MyTravel says it has already received letters from bondholders who say they will vote in favour of extending the maturity of 66% of the outstanding convertible bonds.
The refinancing of a £1.3 billion debt until May 2006 is dependent on these bonds being refinanced by September 30.


FINANCE CHIEF KANTOR LEAVES MYTRAVEL

22 Aug 2003 15:24 GMT

MYTRAVEL group finance director Kazia Kantor has resigned with immediate effect after less than a year with the company.
Chartered accountant Kantor was appointed in November 2002, replacing David Jardine, at the height of MyTravel's financial woes.
Her arrival was welcomed in City circles following her restructure of ailing textile giant Coats Viyella.
Group chief executive Peter McHugh said: "With our refinancing in place, Kazia is able to relinquish her post."
She is succeeded on an interim basis by John Darlington, who will be acting chief financial officer until a permanent successor is appointed.
Darlington, who has been employed by the company for a couple of months to help turn around the company's financial fortunes, was most recently a special adviser to the group board at drinks company HP Bulmer.


ENDACOTT LEAVES MYTRAVEL IN RESTRUCTURE

11 Sep 2003 15:21 GMT

MYTRAVEL UK deputy chief operating officer Steve Endacott has left the company following the announcement of a major restructure of its UK charter and distribution business.
Endacott joined MyTravel in August last year as commercial director for the UK charter and retail distribution businesses. In May he was promoted to the position of deputy COO, though his responsibilities remained unchanged.
The restructure will see MyTravel’s core operations merged into one business, incorporating Airtours Holidays, Going Places, HolidayLine, MyTravelLite, MyTravelAirways UK, Sun Cruises, Hotels Division, White Horse Insurance and eMedia Commercial.
A single management team, led by Kevin McCarten, will be responsible for the core business structure.
The restructure will eliminate a number of existing management positions to create three new senior management posts.
A distribution and customer service director post goes to Airtours Holidays deputy managing director Tim Clancy, while Direct Holidays managing director Rick Green retains his position, but takes on the role of UK trading director. Retail distribution managing director Dave Harris becomes change programme director responsible for overseeing the detail.
Meanwhile, MyTravel’s specialist UK tour operators – Cresta, Bridge, Direct Holidays, Panorama and Manos and Tradewinds - will operate in the same way, but will report to UK chief executive officer Duncan Wilson.


BOND FAVOURITE TO LAND JETSET FLIGHTS

19 Sep 2003 11:07 GMT

THE MyTravel board is still in talks on the future of Jetset Flights, including a possible management buyout.
Jetset Flights commercial director John Bond said he was waiting with baited breath for a decision on the buyout proposal, with sources close to the company saying his deal is the most likely option.
This would put the company in the hands of Bond and current Jetset Flights managing director David Partington.
Another option for MyTravel could be to close Jetset following a sales downturn, an increase in on-line bookings and technology changes (Travel Weekly July 28).
Jetset passenger volumes have dropped from 350,000 to around 200,000 in three years.
When booking system TravelCat goes live in Going Places stores in November, agents won’t be able to book Jetset Flights because the technology is incompatible.
Bond, who originally set up Jetset Flights, claims a deal with a web technology supplier to solve the problem is close and hopes to work with airlines to stop the passenger decline.
Staff at Enfield-based Jetset have been through a consultation on the future of their jobs but more than 20 have since left.


DEAL CLOSE FOR JETSET FLIGHTS

24 Sep 2003 09:16 GMT

MYTRAVEL has agreed in principal to a management buy-out of its scheduled seat-only arm Jetset Flights for an undisclosed sum.
The details of the deal have yet to be hammered out by the companies, which are likely to complete the transaction over the next six to 12 weeks.
New joint shareholders John Bond, who is commercial director, and managing director David Partington, have pledged there will be no redundancies.
A further 15 staff are being recruited to bring numbers up to around 90.


CRESTA SUFFERS MYTRAVEL 'HANGOVER'

26 Sep 2003 12:09 GMT

CRESTA expects to end the year 15%-20% down overall after a downturn in the short-break market coupled with the impact of internal issues related to troubled parent company MyTravel.
While the operator cited the effect of the Iraq war and a fall-off in consumer confidence related to the UK economy, it admitted the group’s financial crisis had also been to blame.
Earlier this year, the operator was put up for sale, but no buyer could be found, and in 2002 its brochures were de-racked by rivals after a head-office spat between MyTravel, TUI and Thomas Cook.
Neither served to instill confidence in travel agents or consumers, said head of sales and marketing Jane Williams.
“There is no point pretending we have not had our own issues,” she said.
She conceded MyTravel’s financial woes, and the fact Cresta was referred to in many stories written about its parent company, also had a knock-on effect. The bookings downturn has been particularly noticeable because Cresta had one of its best ever autumns immediately after the September 11 attacks when there was a pick-up in demand for short breaks.
Commercial director David Gaster added: “This year there has been a different customer approach. We feel our customers have felt less certain in terms of the economy. The market has also struggled. The fact the no-frills carriers were doing £1 seat sales during August is indicative of that.”


MYTRAVEL REVISES DEAL WITH BANKERS

30 Sep 2003 17:02 GMT

MYTRAVEL has revised its deal with bankers so it can use the proceeds of any disposals as general working capital rather than to pay off debts.
The new agreement comes as MyTravel attempts to sell off parts of its US business, which US company Carlson Leisure Group is rumoured to be interested in.
The move means MyTravel now has to pay a consent fee to bankers which is linked to any increase in the company's share price.
The banks will now receive 13.5% of any rise above £50 million in MyTravel's market capitalisation by May 2006, when the £1.3 billion debt has to be refinanced.


MYTRAVEL OFFLOADS GERMAN BUSINESS

01 Oct 2003 14:27 GMT

MYTRAVEL has sold off its loss-making German business and two smaller tour operators in Poland.
Frosch Touristik GmbH (FTi) is the fifth largest tour operator in Germany but also operates in Austria and Switzerland. It has been sold to RM3366, a privately-owned German company, for a nominal consideration.
In Poland, Ving Sp z o.o and Itaka Sp z o.o. have been sold to a consortium, including members of the management team. There was no material cash consideration for the sale.
The disposals will result in an exceptional loss for MyTravel in the year to September 30, 2003, of £86 million.
MyTravel added that the Civil Aviation Authority had also confirmed it was renewing the company's ATOL, valid from today, October 1.


PAY RISE FOR MYTRAVEL SHOP STAFF

09 Oct 2003 18:36 GMT

MYTRAVEL has attempted to boost staff morale with an average 3% pay rise for all retail staff.
The rise - which will affect all 4,000 Going Places and Travelworld retail staff including shop managers and sales consultants - will be less than 3% for some, rising to 7% for others depending on performance. A 3% rise on the £8,500 base starting salary of a Going Places consultant brings it to £8,755.
However, MyTravel said the pay rise was not related to the pay and rewards programme implemented by former UK retail distribution managing director Dave Harris. This has been “parked”, according to MyTravel, and will be reviewed by new distribution and customer service director Tim Clancy.
Phase three of the programme - with pay grades linked to productivity, training and experience - was due to be rolled out in April, but was put on hold due to the war in Iraq.
A MyTravel spokeswoman said: “We implemented part of the pay and rewards programme, but circumstances overtook us and we had to put it on hold. It’s being reviewed.”
The pay rise comes as the operator looks to slash costs to reduce its £1.3 billion debt.


ENDACOTT SET FOR RETURN?

09 Oct 2003 18:41 GMT

FORMER MyTravel UK deputy chief operating officer Steve Endacott plans to buy a small to medium-sized tour operator following his departure from the company.
Endacott left the troubled firm last month after a management restructure. He has vowed not to rush back into the industry but intends to raise finances to buy a tour operator, although he would not give details on the type of operation he wants to buy.
He admitted he would like to start a company from scratch but instead plans to “mould an existing company into the mechanism I want it to be”.
Endacott refused to rule out a return to corporate life but said it was “unlikely”. “I want to make sure it is the right move,” he said.


MYTRAVEL SELLS US BUSINESSES

20 Oct 2003 11:17 GMT

MYTRAVEL has announced plans to push ahead with its disposal programme, following the sale of its US cruise business and loss-making US tour operators.
MyTravel has entered into an agreement to sell its US cruise businesses to National Leisure Group for £65.9 million in cash, while its loss-making US-based tour operators, SunTrips and Vacation Express are being sold to FS Tours for £9.9 million in cash over seven years.
Due to the size of MyTravel’s US cruise businesses, the sale is conditional shareholders’ approval, on getting clearance from anti-trust regulators in the US and on NLG having obtained the finance required. However, the sale is expected to go through by mid-November.

MyTravel’s US cruise businesses comprises brands such as CruisesOnly, CruiseOne, Cruises, Ship ‘n’ Shore and Landry and King. The operator’s UK-based Sun Cruises remains part of the group.
The cruises businesses made an operating profit in the year to 30 September 2002 of £7.1 million, while SunTrips/Vacation Express made a loss in the year to September 30 2002 of £6 million.
MyTravel said the disposals were necessary in order to provide sufficient working capital for the group, but it will continue to “pursue its disposal programme” and identify cost-savings.


MYTRAVEL CAUTIOUS OVER 2004 BOOKINGS

20 Oct 2003 15:17 GMT

MYTRAVEL has issued a cautious trading statement for 2004 bookings claiming it faces significant challenges ahead.
The beleaguered operator said bookings for winter 2003/04 and summer 2004 are “satisfactory” at this stage and at “acceptable” margins.
But it admitted the group still faces “significant challenges which will take time to overcome”.
In a statement, MyTravel said it was confident it would be able to deliver the cost savings it has identified, but its high fixed cost structure and high debt levels meant its earnings and cash flows will remain subject to “significant risk”.


MYTRAVEL SELLS THIRD US BUSINESS FOR £29.9M

22 Oct 2003 09:48 GMT


MYTRAVEL has today announced a further sale of one of its US businesses - World Choice Travel - for £29.9 million.
The disposal is the third to be announced by the cash-strapped travel giant this week, netting £105.2 million in total.
World Choice Travel, based in Florida, is a consolidator and distributor of hotel rooms and other travel-related products through a network of 1,700 affiliate companies operating more than 2,300 websites in 42 countries, but focused on north America.
WCT made an operating profit in the year to September 30, 2002, of £400,000. The sale will result in an exceptional profit in the year to September 30, 2004, of £24.7 million.
The sale is conditional on MyTravel shareholders' approval and clearance from antitrust regulators in the US. It is expected to be completed by mid-November.
The announcement follows news the company is selling its US cruise business and loss-making US operators SunTrips and Vacation Express and represents MyTravel's bid to raise cash for working capital for the debt-ridden group.
The date for an extraordinary general meeting for shareholders to approve the sales has yet to be announced.


MYTRAVEL REVEALS EXTENT OF WOES

07 Nov 2003 10:05 GMT

THE industry has reacted with shock to news MyTravel will post a second half operating loss for the first time.
The Civil Aviation Authority and the banks were said to be planning an emergency meeting following a shareholder circular blaming a poor end to summer trading and more conservative accounting for the loss.
Sources said it was the first time they knew of one of the big four losing cash in the second half - the period when mass-market operators make their money.
“This is incredibly unusual. Everyone makes profit in the summer to offset winter losses,” said one operator.
Analysts described the report as “unbelievable”. “It is now questionable whether it will make it through the winter,” said one.
The circular also made a plea for support for the disposals of its US cruise business, US consolidator and hotel distribution business World Choice Travel and the US car rental company Auto Europe, now in the process of being sold to Soros Private Equity Investors for £50.9 million.
MyTravel has identified other companies for disposal if these are unsuccessful.
Days before the circular, chairman Eric Sanderson told Travel Weekly: “There are no plans to sell the Canadian or Scandinavian businesses.
“There is also no pressure to sell the UK specialist operators - they fit well in the range of businesses we have.”
The circular warned cash flow was at “significant risk” short term due to high fixed costs and debts. Sanderson added: “Beyond 12 months, whether or not the continuing MyTravel Group will have sufficient working capital will remain subject to significant uncertainty.”
Three months ago, MyTravel claimed the second half would end up on a par with 2002, but since then sales have weakened with more late bookings, resulting in lower margins.


MYTRAVEL US SALES APPROVED

19 Nov 2003 11:43 GMT

MYTRAVEL is selling another US business while its cruise and hotel distribution companies will be sold off this month following shareholder and US competition authority approval.
Lexington Services is being sold to 4202031 Canada, an affiliate of VIP International Corporation, for £4.6 million in cash. Lexington provides electronic connectivity services between hotels and global distribution systems and alternative distribution systems. It made a loss in the year to September 30, 2002, of £200,000 and had net assets of £2.2 million. At completion of the sale all balances will be settled.
Meanwhile, other sales are likely to be completed this month as expected.
The US cruise division is being sold to National Leisure Group for £65.9 million in cash and US hotel distribution business World Choice Travel to Sabre's Travelocity for £29.9 million.
Shareholders have also approved the sale of US car rental business Auto Europe for £50.4 million. Contracts for the sale have now been exchanged with Soros Private Equity Investors.
MyTravel, which has also sold US operators SunTrips and Vacation Express for £9.9 million in cash to FS Tours, plans to use the money from the sales for working capital rather than to pay off its £1.3 billion debt.


WILSON QUITS MYTRAVEL

05 Dec 2003 09:10 GMT

MYTRAVEL chief executive UK and Ireland Duncan Wilson has quit, claiming his role ‘has come to a natural conclusion’.
The beleaguered operator’s chief operating officer Philip Jansen will take over his responsibilities, although Wilson will remain employed by MyTravel for a short handover period.
Wilson, who became UK chief executive in April 2002, was rumoured to be facing the axe in two newspapers last weekend. MyTravel will release its full-year results on Thursday with the City predicting losses of anywhere between £250 million-£300 million before goodwill and exceptional items.
Group chief executive Peter McHugh said: “I am pleased that in Duncan’s new position we will be able to draw on his long experience of the travel industry. Philip Jansen has a pivotal role to play in the turnaround of MyTravel and it is appropriate he should have ‘hands-on’ control of the core UK business.”
Meanwhile, tour operations aviation director Bill McGrorty will also leave the company at the end of the year for personal reasons. There are no plans to replace him and his role will be split between MyTravel Airways and the Airtours Holidays commercial team.


MYTRAVEL REPORTS LOSSES OF £910.9 MILLION

11 Dec 2003 10:18 GMT

By Sarah Thomas

MYTRAVEL chief executive Peter McHugh has said he expects the group to return to profitability in 2005, despite posting annual pre-tax losses of £910.9 million today.
McHugh blamed one-off costs, structural problems and poor management systems for the massive losses. It reported an operating loss of £358.3 million, with the UK business accounting for £325.4 million. Exceptional items came in at £472.7 million.
Despite the heavy losses, no announcements have been made regarding job cuts or shop closures. However, McHugh said the beleaguered operator was "on schedule" to deliver cost savings of at least £150 million in 2005.
He admitted 2003 had been "disappointing" but said bookings for winter 2003/04 were in line with expectations and margins had improved over the previous year. Summer business is currently down but in line with the rest of the industry and is also showing better margins, he added.
McHugh remained upbeat about the group's progress in reversing its fortunes.
"Although the group faces significant challenges, which will take time to overcome, the turnaround can be achieved," he said. "We are working towards a significant improvement in 2004 and a return to profitability in 2005."
The company also announced the appointment of John Allkins as group finance director. Allkins joins from data communications firm Equant. Interim chief financial officer John Darlington will now concentrate on his main role of restructuring the UK charter and distribution business.