1. you provide anectdotal evidence to negate my point, hardly convincing. Margins are thin, thats a fact. Any adverse hit will affect its bottom line. Mytravel themselves actually hope to achieve industry margins of 3.5 per cent by 2007. I would say margins of 3.5% were thin at best, if not wafer thin, dont you think ? So there's no room for error, if anything adverse happens, those margins disappear.
2. Swings in property prices can have a big impact on economic growth. Since the IT and stockmarket bubbles burst, rising property prices around the globe have helped to prop up the world economy. Rising house prices have boosted consumer spending by making people feel wealthier, offsetting the effect of falling share prices. Consumers have also been able to borrow more against the higher value of their homes, turning capital gains into cash which they can spend on a new car or a holiday.
But just as rising house prices help to boost spending, so falling house prices can cause economic pain. In an analysis of a number of earlier housing bubbles, the IMF's latest World Economic Outlook found that output losses after house-price busts in rich countries have on average been twice as large as those after stockmarket crashes. The average real decline after a house-price bust has been more modest than after a stockmarket crash (30% over four years against 45% over two-and-and-half years), but at the end of that period GDP had fallen by an average of 8% relative to its previous growth trend, compared with 4% after a share-price bust. The IMF also found that a sharp rise in house prices in real terms is much more likely to be followed by a bust than is a share-price boom. - economist may 2003
3. you forgot one bloke that can make any sort of profitability in 2007 or sooner, disappear in a cloud of smoke. Namely a certain bin ladin. Need I remind what got MyTravel into the mess in the first place :
MyTravel, formerly known as Airtours, came close to collapse amid a sharp downturn in overseas travel following the Sept 11 2001 attacks.
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