Airtours lifted - but for how much longer?

[The Guvnor]

From today's Scotsman

Airtours lifted

AIRTOURS badly needed to say something positive, with its shares having fallen to their lowest level in six months.

The company said yesterday that UK summer bookings are 12 per cent ahead of last year, with average selling prices and load factors also up.

While fears of recession grow, the average UK consumer feels he has enough cash in his pocket for a holiday. The Bank of England’s four interest rate cuts have reduced mortgages payments to their lowest in 30 years, leaving more disposable income.

Airtours shares rose 11p, or 4.7 per cent, to 247p. The company reported turnover of £1.45
billion for the three months to 30 June, an increase of 24.9 per cent. The UK accounts for 54 per cent of the company’s sales. Turnover almost doubled at FTi, the company’s German operation, to £166.3 million.

However, FTi is still trading at a loss, albeit one that was reduced to £7 million from £11.1 million.

The picture after exceptionals, goodwill and tax is not so rosy. The company made a loss of £6.7 million, compared with £5.5 million a year earlier.

Carnival Cruises of the US held a 25 per cent stake in the company, and this had caused a drag on the share price. It was no surprise when Carnival said in May that it was looking to sell. Buyers came in to support the shares, but perhaps only because they were cheap, compared with the £5-plus levels they reached in 1999.

Analysts say the company will generate earnings-per-share of 18.9p for 2001 and 24.7p for 2002, after adjusting for exceptionals and goodwill. This gives price-earnings ratios of 13 and 10. The FTSE All-share year-averages are 20.2 and 18.7 respectively.

This makes Airtours look cheap, but the company may be a casualty if consumer confidence declines.

[763 jock]

Its operating 50 more aircraft than you are Guv!!

[sluggums]

Guv, give it a break will you

[willoman]

There are too many airlines/tour groups chasing customers in UK. It has long been thought that one of the big ones will soon fall by the wayside. If there is a serious recession, Airtours will go from merely haemorrhaging to bleeding.

[JB007]

Don't agree...I think AIH will be around for a while, infact I wouldn't be suprised to see a whole new image for the group within 2 years including a name change....!!! ;)

[Big Tudor]

Don't think 247p per share is to bad when you consider First Choice is at 135p. Ok, First Choice haven't experienced the massive rise and fall in share price that AIH has but surely the lower the price the more at risk you are. IMHO AIH is not the worst of the UK charter airlines by a long chalk.

[GustyOrange]

Big Tudor
The actual price of the shares is irrelevant because it only reflects the amount of shares issued relative to the value or market capitalisation of the company.

ie company A has 10,000 shares issued and they trade at £1. Company B has 1,000 shares issued and they trade at £10. Then the value or market cap of these 2 companies is exactly the same despite the difference in the share price. If you are analysing a company you can look at the market value compared to the book value, known as price/book. Or price earnings ratio (P/E) which is self explanatory, dividend yield is another commomly used yardstick, ie how much does the company pay out. Sophisticated investors have a host of other measurements they would look at.

hope I have not been too boring! :D

[homer j]

"The Times" ran two articles today, both favourable, one describing the turnaround in overseas AIH operations, the other, by Robert Cole ("Tempus"), says "Buy"! Sounds OK to me!...

[Desk Driver]

This is not a good year for any Tour Op. Just look down the back guys, have you ever seen so many empty seats in August? Thomson And Airtours are safe just because of their size,as for othres well you just don't know, but, no one will make much money this year.

BTW How can buying a loss making operation one year and closing it the next be considered good business by Airtours?


My Stock Tip.
"Put your money in other industrys!"
:(

[The Guvnor]

I hear that Airtours is to be rebranded (rather uninspiringly, in my opinion) "MyTravel".

The following sign has apparently replaced that of Airtours at HUY.

http://www.geocities.com/europeancentral/MyTravel.gif

Is this true? Comments?

[autobrakemedium]

Desk Driver,

Our charter loads have been very good.

[El Grifo]

Well Guvernor, As a long time travel Photographer,I am currently shooting
Summer 2002 Brochures big style.
Confidence seems very high and the key phrase is "branding branding and more branding" - - - -Current branding that is !!!!!

[ 11 August 2001: Message edited by: El Grifo ]

[ 11 August 2001: Message edited by: El Grifo ]

[SFly]

Sounds like a load of tripe to me.

Airtours is doing very well at "filling 'em" at the moment, and why knock them when they are finally in a up-turn?

A name change? Give it a break Guv. If you were a holiday passenger, you would look first to a well known brand. Airtours is generally a well-known, reputable, trusted name, and a name change would do nothing for them whatsoever.

Let us use our logic for a moment, shall we?

If a major travel concern was to make a large-scale, complete identity change, do you suppose that the public would find out about it from a more conspicuous source than a small sign at a desk in Humberside?

Could it just be that the desk was taken over by somebody else?

Heh, what a daft idea!

SFly :rolleyes:

[mallard]

It worries me to see the words Guv and Airtours in the same post.
I happily admit to working for AIH and am equally happy that we are nearly always full thank you.

[homer j]

"Mytravel.co" is a new AIH internet booking company. Not a re-brand, but an additional brand in the AIH group. I think the idea is to expand into the US Ebooking market.

[ 12 August 2001: Message edited by: homer j ]

[BigRab]

I’ve noticed more empty seats than usual.
That might not be a bad thing, as I’m not in favour of devaluing the product by giving it away and at the same time making those who have paid the proper price feel ripped off.
My feeling is that there is a downturn on the way, so the industry would be wise to reduce capacity.
I expect they will carry on as usual, then have a fire sale and expect the employees to pay for it.

:mad:

[K13 + K9]

Is it true that the Man from Leisure has gone in a sharpening of the knives ?. :confused: :D

[SFly]

K13+K9 . . . What??? :confused:

[Finbarr]

K9 etc ... Yes it's true! Fat useless bastard!

[SFly]

Are you referring to the ex-MD? Why did he go then?

[K13 + K9]

I would not have been as vitriolic as Finn at his departure but I do know several people who will be very glad at his fate.
Rumour over here was that he cost the company too much money.

:D : :confused:

[Desk Driver]

Do you mean the CP???

[Day_Dreamer]

K13 + K9

I think you are refering to the MD who came from Leisure before they were sold to Air 2000 :confused:

[xriter]

well we seem to be full every trip....and thats the widebodies....... :rolleyes:

[SZD]

Airtours don't have a problem filling their aircraft. They just seem to have something against their passengers getting airborne.

:p

[SFly]

Day Dreamer, we have established that, I am wondering why he went. Any AIH people care to share?

[RVR800]

Guv - are talking up a 'recession' again...

Why ?...

People are using the alleged recession as
an excuse for inactivity ....

Airtours pre-tax profits for the three months to 30 June were £4.2m, in comparison to a loss of £2m in the same period last year.

This is excellent and a credit to the company which is clearly doing very well

Airtours Summer bookings were up 12% in the UK, while group bookings for the winter are also up 9%.

The company's chairman David Crossland said he was "extremely pleased" with the results.

I cant say I disagree the company is doing well

Im sure it will be accounted for in the next payround!

[salope]

Guv,if you look closely you will see that all Airtours ticket desks in the UK have been rebranded Mytravel.
It is a device to represent all Airtours Group companies eg Direct Holidays,Panorama,Manosetc a sensible,if overdue rationalisation.

[Southern Fairey]

SFly,

'Personal Reasons' is the official line, which only adds to the speculation. Haven't heard any reasons with any weight behind them though.

Interesting times at AIH - a lot happening at the top!

S.F.

[Desk Driver]

Yes I accept some flights maybe full , but, the revenue is very poor. £79 in august to PMI a worry for everyone. Pure and simple there is too much capacity in the market and no one is doing well.....no one! :mad:

[Marko Ramius]

Desk Driver,

Where do yo get your information from? Also you talk about £79.00 to PMI to which you must be referring to schedule, and yet earlier on you were talking about charters.

I am confused at which sector of the market you are talking about.

[The Guvnor]

RVR800 - you 'blue sky-ing' it again, mate? You must be about the only person in the UK not to accept that we're in an economic downtun (and btw it's official - the industrial sector of the UK economy is in recession, according to the Treasury and the Bank of England ... but what would they know? :D :D :D ) - and whilst the service sector is doing fine at the moment that will change over the next few months. On the charter side of the fence, loads and bookings are well down and I'm convinced that at least one major operator will probably be a casualty.

[ 16 August 2001: Message edited by: The Guvnor ]

[Boss Raptor]

What Guv, another 'casualty'?

Just like your Caledonian Wings/Lionair which seems also to have been a 'casualty'(or a non starter depending on personal viewpoint)...

[Desk Driver]

Marko,

I'm still talking about charter

LGW - PMI 23/8/01 14 nts £79 inc (see your local travel agent for details)

As for getting this info, well I'm the guy who has to explain why prices are so low in august to the large cheeses. Not a good desk to drive at the moment. :rolleyes:
This year Capacity is way over and pressure to fly LGW slots or lose them is immense. Let's hope that aircraft utilization around europe for the major charter boys and (won't happen) but a secound runway at LGW kicks in sooner rather than later.

[ 16 August 2001: Message edited by: Desk Driver ]

[G-BPEC]

SFly,

I thought you were an AIH person?

[Wee Weasley Welshman]

On the matter of the UK economy and the next year or two I would urge eveyone to read this article by Anatole Kaletsky in The Times today -
http://www.thetimes.co.uk/article/0,,248-2001283468,00.html

Anatole won a prestigous award recently for writing the best piece of economic journalism in the UK press. I have found his judgement to have been quite reliable over the years.

I for one am looking forward to next years boom... :)

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