I have posted the following report from Yahoo Business on our Air 2000 forum for information only. However the mention of reduction in fleet size from 56 to 47 is worthy of note as presumably this is going to involve associated pilot redundancies. Best wishes to all at MYT
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MyTravel upbeat despite huge loss
By Lara Smith
LONDON (Reuters) - Crisis-hit holiday firm MyTravel Group says its annual loss has widened by more than 10 times but it had enough cash to survive to next summer.
The firm posted a pre-tax loss on ordinary activities of 910.9 million pounds for the year ended September 30, compared with a 72.8 million pound loss the previous year. Analysts had been expecting a loss of about 600 million pounds.
"We are confident that we will continue to operate and that we will be successful in the turnaround," Chief Executive Peter McHugh told BBC Radio 4 on Thursday.
"We have cash to make it through the winter. We have a turnaround plan that we expect to bring us back to profitability by 2005, (and) even though the numbers are dreadful, they are optimistic at this point," he said.
The indebted tour operator, formerly known as Airtours, has sold assets to raise money as it strives to recover from a series of profit warnings and accounting errors, which sent its shares into freefall from over 500 pence in 1999.
Its stock, the third most heavily traded in London by number of shares on Thursday, was up 17 percent at 10.5 pence at 1120 GMT, after earlier reaching as high as 12p.
One analyst, who wished not to be identified, said that although MyTravel (LSE: MT.L - news) 's results were worse than expected and its outlook for a return to profitability was a year later than previously seen, the shares rose because the travel company eased concerns that it might not survive another year.
The announcement did not lead analysts to change any recommendations or targets, however, he said.
A trader said the shares rose because people were moving to cover their positions after selling the stock as low as 7p.
TURNAROUND PLAN
MyTravel said it had refinanced its 1.3 billion pound debt to May 2006 and extended 221.6 million pounds of convertible bonds to January 2007.
Its turnaround plan includes cutting its aircraft fleet to 47 from 56 and reducing the number of cruise ships it operates, McHugh told journalists.
Disposals of four U.S. businesses provided working capital of 144 million pounds. It also sold its loss-making German and Polish operations and was consolidating nine UK businesses, including Airtours Holidays, MyTravel Airways UK and Going Places. No further disposals were planned, McHugh said.
Holiday firms across the world have been struggling with a slump in tourism due to the SARS outbreak and Iraq war.
MyTravel fared worse than most because it had ramped up capacity in a bid to capture market share, leaving it exposed to high fixed costs and price cuts when the market slumped.
Bookings for winter 2003/2004 are down about 17 percent, in line with the company's expectations. Bookings for summer 2004 also are down on the previous year, but margins have improved, the firm said.
Earlier this week, rival First Choice Holidays (LSE: FCD.L - news) said summer bookings in its main UK business were about 20 percent below the same time last year, although it said it was confident business would pick up.
McHugh said exceptional charges of 472.7 million pounds were due largely to writing down costs of holidays that didn't sell and to poor management systems, which affected its ability to make reliable forecasts and led to incorrect pricing of holidays.
Holidaymakers who had booked with MyTravel were at no risk of losing their vacations, McHugh stressed.
John Allkins was appointed group finance director following a spate of boardroom resignations.