MyTravel in financial trouble
Try this link to the FT online pages.
http://news.ft.com/servlet/ContentSe...=1012571727085
And for the latest price, try here.
http://mwprices.ft.com/custom/ft-com...avel&t=e&s2=uk
Good luck to all staff and crews at MyT from us all in Air 2000.
http://news.ft.com/servlet/ContentSe...=1012571727085
And for the latest price, try here.
http://mwprices.ft.com/custom/ft-com...avel&t=e&s2=uk
Good luck to all staff and crews at MyT from us all in Air 2000.
DIRECTOR
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Surely no one wants MYT to go bust but whether thay are an excellent airline and employ marvellous people does not come into the equation.
Bad management has caused the problem and whether it survives will depend on the attitude of the Bankers and whether they approve of the business plan looking forward.
I wonder whether perhaps with the Lo Cost Airlines there is just too much capacity in the IT business as I saw on CNBC that the package tour is in decline and maybe there are just too players in the field?? If this is the case then maybe an Airline will need to fall in the same way as there are too many Airlines in Europe,being subsidised by their respective taxpayers despite EU rules which are blatant ly ignored by the French in particular.
Bad management has caused the problem and whether it survives will depend on the attitude of the Bankers and whether they approve of the business plan looking forward.
I wonder whether perhaps with the Lo Cost Airlines there is just too much capacity in the IT business as I saw on CNBC that the package tour is in decline and maybe there are just too players in the field?? If this is the case then maybe an Airline will need to fall in the same way as there are too many Airlines in Europe,being subsidised by their respective taxpayers despite EU rules which are blatant ly ignored by the French in particular.
BBC 0800 news reported that MYT have just announced a £72 million loss with an overstatement of £20 million last year.
The company claim last year to be it's worst ever.
The FT online hotline (tickertape) news say's that David Jardine is to go with immediate effect.
Can't find any other online news yet.
The company claim last year to be it's worst ever.
The FT online hotline (tickertape) news say's that David Jardine is to go with immediate effect.
Can't find any other online news yet.
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link to LSE announcement
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Shares now slipping back to 32.5p after an initial surge to 36p. I don't think investors are convinced. They might, however, be waiting for the outcome of an analysts meeting which started at 0830.
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The good news for those of you connected with the company is that the Banks have committed their support until end-2003. They will not be doing it for free though, which might impact jobs.
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MY Travel will have to pay £12 million for this credit line.
The banks are still a bit shaky and so to reduce their risk they are spreading the loan around amongst other banks and of course everyone wants their bit of the pie.
The banks have said that MYT must turn around the group within 12 months so they're not out of the woods yet. Therefore expect a major restructure with an awful lot of the smaller business's sold off.
As always a lot of hardworking proffesional people have been let down by money grabbing greedy executives who can wreck livelyhoods and the get a golden parachute for doing so.
Good luck to all
The banks are still a bit shaky and so to reduce their risk they are spreading the loan around amongst other banks and of course everyone wants their bit of the pie.
The banks have said that MYT must turn around the group within 12 months so they're not out of the woods yet. Therefore expect a major restructure with an awful lot of the smaller business's sold off.
As always a lot of hardworking proffesional people have been let down by money grabbing greedy executives who can wreck livelyhoods and the get a golden parachute for doing so.
Good luck to all
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Bloody Jeff Randall
Just saw the report on MYT by Jeff Randall on tonight’s BBC News at Ten and was not impressed. 
Amongst others things, Mr Randall spoke of “the rescue package from the banks.” Correct me if I’m wrong, but isn’t the case that the banks have merely agreed to continue MYT’s revolving overdraft for another year. Hasn’t MYT always had this facility – and doesn’t virtually every charter outfit have one (they make money in the summer and lose it in the winter, so always have need of this credit facility). I believe that the facility had to be re-agreed each year and that this year was nothing new (except that MYT brought the negotiations forwards themselves to get the facility sorted in time for the accounts). If this is the case, I really don’t see that “rescue package” is anything but a unnecessarily inaccurate way to describe the banking agreement – a further attempt by the media to undermine customer confidence in MYT.
Mr Randall went on to add insult to injury by saying that MYT had been “given one last chance.” I don’t even know where to start with the lack of integrity in that claim.
Ah well, despite the Beeb’s best efforts, the bookings are still going well and will hopefully only get better now last year’s results are finally done and dusted.
Amongst others things, Mr Randall spoke of “the rescue package from the banks.” Correct me if I’m wrong, but isn’t the case that the banks have merely agreed to continue MYT’s revolving overdraft for another year. Hasn’t MYT always had this facility – and doesn’t virtually every charter outfit have one (they make money in the summer and lose it in the winter, so always have need of this credit facility). I believe that the facility had to be re-agreed each year and that this year was nothing new (except that MYT brought the negotiations forwards themselves to get the facility sorted in time for the accounts). If this is the case, I really don’t see that “rescue package” is anything but a unnecessarily inaccurate way to describe the banking agreement – a further attempt by the media to undermine customer confidence in MYT.
Mr Randall went on to add insult to injury by saying that MYT had been “given one last chance.” I don’t even know where to start with the lack of integrity in that claim.
Ah well, despite the Beeb’s best efforts, the bookings are still going well and will hopefully only get better now last year’s results are finally done and dusted.
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Indeed U/S your outburst is warranted. If you think Randall is a little over - reactionary on camera, you need to see what crap he writes.
Objective - no, totally over- reactive and headline seeking - yes!
Another thumbs down for the BBC..........We need a TV revolution, Immediately!
p.s. I fear My Travel will have difficulty selling that 900B for US$22.75 M
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....................Glad Life's only Bizjets...............................
Objective - no, totally over- reactive and headline seeking - yes!
Another thumbs down for the BBC..........We need a TV revolution, Immediately!
p.s. I fear My Travel will have difficulty selling that 900B for US$22.75 M
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....................Glad Life's only Bizjets...............................
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As I understand it the banks have given My Travel a year to turn things around or no more credit.
When you drop from £62m profit to £70+m loss finding credit becomes a hell of a lot harder.
When you drop from £62m profit to £70+m loss finding credit becomes a hell of a lot harder.
Keeping Danny in Sandwiches
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I think that Randall was correct, it was a rescue package. MyTravel are going into the winter without any money and needed credit. No company is entitled to credit from a bank and has to justify it. The banks took a view that the risk was worth the return (no doubt the cost reflected the risk) as by February the company will be relying on its overdraft to keep it afloat.
At least the rest of the industry won't be faced with another bout of selling below cost by MYT.
His comment was accurate.
At least the rest of the industry won't be faced with another bout of selling below cost by MYT.
His comment was accurate.
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So sky9 , do you think that MYT’s revolving overdraft has always constituted a “rescue” package. Has MYT been “rescued” every winter for the last 11 years? Like I said, nearly every tour operator/charter company uses an overdraft facility during the winter: do you think it’s fair to say that most tour operator/charter companies are constantly being “rescued” 
.
To a normal person, the term “rescue” conjures up the inaccurate image of MYT unforeseeably running out of cash and needing to secure some sort of extra loan from the banks. This is far from the true scenario of MYT simply renewing the revolving overdraft it’s always had
.
The media might not report outright lies but their speciality is distorting truths to have the same effect as lies.
, do you think that MYT’s revolving overdraft has always constituted a “rescue” package. Has MYT been “rescued” every winter for the last 11 years? Like I said, nearly every tour operator/charter company uses an overdraft facility during the winter: do you think it’s fair to say that most tour operator/charter companies are constantly being “rescued” .To a normal person, the term “rescue” conjures up the inaccurate image of MYT unforeseeably running out of cash and needing to secure some sort of extra loan from the banks. This is far from the true scenario of MYT simply renewing the revolving overdraft it’s always had
.The media might not report outright lies but their speciality is distorting truths to have the same effect as lies
.
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sky9 it is a pity that you seem to know little of how business and more importantly the airline business works.
U/S P has got it about right. It certainly isn't a rescue package. It is a continuation of the existing credit facility (an overdraft if you like) that ALL business and the airlines need. Such a facility is necessary while they wait for funds commited to them to arrive in their bank. That can take many weeks.
In the meantime, the fuel companies, ground handlers, EU, hotels, airports and any number of other creditors want their cash without waiting more than 28 days - or by negotiation - but given that MYT has a fair size chunk of working cash and a good future, I would say they are about re-establish. And, of course, the banks want to see that all is well one year from now. Very fair I would say.
So, this is where DC gets his feet back under the table and assists the people who are going to take MYT forward. Certain elements may get sold but NOT the airline. That is the core business.
U/S P has got it about right. It certainly isn't a rescue package. It is a continuation of the existing credit facility (an overdraft if you like) that ALL business and the airlines need. Such a facility is necessary while they wait for funds commited to them to arrive in their bank. That can take many weeks.
In the meantime, the fuel companies, ground handlers, EU, hotels, airports and any number of other creditors want their cash without waiting more than 28 days - or by negotiation - but given that MYT has a fair size chunk of working cash and a good future, I would say they are about re-establish. And, of course, the banks want to see that all is well one year from now. Very fair I would say.
So, this is where DC gets his feet back under the table and assists the people who are going to take MYT forward. Certain elements may get sold but NOT the airline. That is the core business.
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Sky9
I think you are getting out of your depth here a bit. Nowadays, all credit facilities are for a fixed duration and have to be renewed. No bank will give an open-ended credit facility to a company. Why not? The answer is very simple really; it’s an easy way for the bank to extort their ‘arrangement fees’ out of their customers at regular intervals, even if the renewal of facilities is just a paper exercise. ‘Extort’ here, is the right word, but that is an entirely different subject for debate!
You are quite correct when you say that no company is entitled to credit, they have to justify it. You show me any bank that will lend to any company in the world because they are ‘entitled to it’. No such company exists.
Apart from a few notable exceptions, there are virtually no companies in the world that do not rely on some form of credit facility; whether it be an aircraft lease, a bank overdraft, line of credit, factoring agreement (to protect against debtors not paying their bills on time). Withdrawal of those facilities would probably bring most of those companies down instantly. Likewise, if those credit arrangements were not renewed, most companies would go belly-up. The fact is that they generally are, (if justified to the credit institution) and life goes on as normal. Notable exceptions are GEC in the past that were in the fortunate position of sitting on ‘a cash mountain’ waiting for a predatory strike. I’ll lay an even dollar bet that companies like Boeing have big problems in cash-flow and therefore require significant credit. They have to buy components and build aircraft that they cannot sell until complete. My father was boss of a big building company; they had a credit line of £4million and that was 40 years ago. That enabled them to buy sizeable blocks of land for future development. They could afford to sit on that land, awaiting planning permission and development. They got no return until they built a house or whatever and sold it to the end purchaser, but that was the nature of their business. I’m getting to my point, don’t worry.
So, let’s examine your statement that the renewal of credit facilities is a ‘rescue package’. If it is a renewal of existing credit facilities, then it clearly cannot be considered a ‘rescue package’. By definition, a ‘rescue package’ would involve an agreement for ‘additional and extraordinary financial assistance’ over and beyond the normal credit line, with the express purpose of saving a company that would otherwise go belly-up. So, with due respect, you should eat some humble pie here.
All airlines are very susceptible to ‘changing fortunes’, because they are very yield sensitive. Take one of the current stars in aviation, Ryanair, for example. They are currently making thumping big profits as are the other LCA’s. Take 20% of their load factor away from them and those thumping big profits would equal thumping big losses and no bank in the world would touch them!
Charter airlines are acutely more sensitive, because their business is very seasonal. Big profits summer, losses in winter. It’s the nature of the European ‘holiday concept’. That in itself is quite extraordinary. When it gets hot here we all go to hotter places and when it gets cold we all shelter in our little nests. The other way round would be more logical, but I guess they don’t serve fish and chips with mushy peas in Bali or gallons of Guinness.
As for commentators, journalists and presenters; they want to sell stories, that’s their job; no requirement for them to be intellectually or financially astute. Do you really believe that the primary requisite of a financial journalist depends on his financial acumen? If he doesn’t sell newspapers, he’s down the road! These guys want to be stars, but they cannot sing or dance. Why do you see Trevor Macdonald at all the celebrity bashes? Think on Sky9
I think you are getting out of your depth here a bit. Nowadays, all credit facilities are for a fixed duration and have to be renewed. No bank will give an open-ended credit facility to a company. Why not? The answer is very simple really; it’s an easy way for the bank to extort their ‘arrangement fees’ out of their customers at regular intervals, even if the renewal of facilities is just a paper exercise. ‘Extort’ here, is the right word, but that is an entirely different subject for debate!
You are quite correct when you say that no company is entitled to credit, they have to justify it. You show me any bank that will lend to any company in the world because they are ‘entitled to it’. No such company exists.
Apart from a few notable exceptions, there are virtually no companies in the world that do not rely on some form of credit facility; whether it be an aircraft lease, a bank overdraft, line of credit, factoring agreement (to protect against debtors not paying their bills on time). Withdrawal of those facilities would probably bring most of those companies down instantly. Likewise, if those credit arrangements were not renewed, most companies would go belly-up. The fact is that they generally are, (if justified to the credit institution) and life goes on as normal. Notable exceptions are GEC in the past that were in the fortunate position of sitting on ‘a cash mountain’ waiting for a predatory strike. I’ll lay an even dollar bet that companies like Boeing have big problems in cash-flow and therefore require significant credit. They have to buy components and build aircraft that they cannot sell until complete. My father was boss of a big building company; they had a credit line of £4million and that was 40 years ago. That enabled them to buy sizeable blocks of land for future development. They could afford to sit on that land, awaiting planning permission and development. They got no return until they built a house or whatever and sold it to the end purchaser, but that was the nature of their business. I’m getting to my point, don’t worry.
So, let’s examine your statement that the renewal of credit facilities is a ‘rescue package’. If it is a renewal of existing credit facilities, then it clearly cannot be considered a ‘rescue package’. By definition, a ‘rescue package’ would involve an agreement for ‘additional and extraordinary financial assistance’ over and beyond the normal credit line, with the express purpose of saving a company that would otherwise go belly-up. So, with due respect, you should eat some humble pie here.
All airlines are very susceptible to ‘changing fortunes’, because they are very yield sensitive. Take one of the current stars in aviation, Ryanair, for example. They are currently making thumping big profits as are the other LCA’s. Take 20% of their load factor away from them and those thumping big profits would equal thumping big losses and no bank in the world would touch them!
Charter airlines are acutely more sensitive, because their business is very seasonal. Big profits summer, losses in winter. It’s the nature of the European ‘holiday concept’. That in itself is quite extraordinary. When it gets hot here we all go to hotter places and when it gets cold we all shelter in our little nests. The other way round would be more logical, but I guess they don’t serve fish and chips with mushy peas in Bali or gallons of Guinness.
As for commentators, journalists and presenters; they want to sell stories, that’s their job; no requirement for them to be intellectually or financially astute. Do you really believe that the primary requisite of a financial journalist depends on his financial acumen? If he doesn’t sell newspapers, he’s down the road! These guys want to be stars, but they cannot sing or dance. Why do you see Trevor Macdonald at all the celebrity bashes? Think on Sky9
Keeping Danny in Sandwiches
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Fillosan,
Of course all charter airlines run at a loss during the winter however they are given those facilities because the banks consider them to be a good risk. They also normally go into the winter with the profits of the last summer behind them. The facts are that the 9 months revolving credit is costing MYTravel some £12.5m.
Comment in todays Daily Tel. suggests that an operating profit of £60m for 2003 will be reduced by £40m interest.
Good to see however that Byrne and Jardin are apparently negotiating payoff of £1.0m and £0.7m.
Of course all charter airlines run at a loss during the winter however they are given those facilities because the banks consider them to be a good risk. They also normally go into the winter with the profits of the last summer behind them. The facts are that the 9 months revolving credit is costing MYTravel some £12.5m.
Comment in todays Daily Tel. suggests that an operating profit of £60m for 2003 will be reduced by £40m interest.
Good to see however that Byrne and Jardin are apparently negotiating payoff of £1.0m and £0.7m.
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sky9
Please read before you credit me as being the reason for your answers. I didn't mention any of what you are saying.
However, you are correct about the interest. But then you pay interest on your borrowings don't you. No! Better in touch with MYT they might to know who your bank/credit card company/etc., etc., etc., - are!
As my friend Horatio says - quit while you are losing. Or....you will fall in the big hole you are digging.
Btw, I was always called Captain - when I was flying that is
just a minor typo
Please read before you credit me as being the reason for your answers. I didn't mention any of what you are saying.
However, you are correct about the interest. But then you pay interest on your borrowings don't you. No! Better in touch with MYT they might to know who your bank/credit card company/etc., etc., etc., - are!
As my friend Horatio says - quit while you are losing. Or....you will fall in the big hole you are digging.
Btw, I was always called Captain - when I was flying that is
just a minor typo
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Sky9
Our dirty linen is now out in the open and the banks seem to think a healthy company still exists! The question that you should be asking is how many other UK companies have inflated their profits? I wonder how many other companies would fair if they were subject to the same level of examination and press coverage.
MYT have a steep hill to climb to get back their tarnished reputation but they still have a lot of valuable assets that are making money. Our problem has been a lack of effective financial control and poor leadership, not a poor performing collection of companies.
The banks are the best endorsement of the health of the underlying business, they would not be lending money to a company they thought would not survive. No company, no interest payments, loan does not get repaid.
This is the first loss MYT have made, they know how to make money, they just lost their way for a while and have been damaged by the actions of a discredited auditing firm. Take a look at Andersens other clients, they are all having big problems.
I doubt you have seen the end of cut price holidays! brace yourself for some very aggressive selling. This is going to be a very diffucult year for every UK operator and some may not survive the winter, it would appear that MYT will survive! If your going to have problems now is the time to do it. I imagine some of our competitors were really hoping MYT would fall to ensure their own survival.
I have already made comment on the standard of reporting. There are good journalists out there but there are a lot more who are only interested in selling papers to those without the wit to tell the difference between news and speculation.
In conclusion Sky9, you are correct in so far as MYT have a long year ahead of them to get their house in order. If the problems were product related I would agree, not much hope for the future. But nearly all their problems seem to relate to poor financial contol and accounting practice, that being the case they have a good chance of making a strong come back as those issues are now being addressed very publicly. The share holders meeting in March should be fun, I might even go this year.
Our dirty linen is now out in the open and the banks seem to think a healthy company still exists! The question that you should be asking is how many other UK companies have inflated their profits? I wonder how many other companies would fair if they were subject to the same level of examination and press coverage.
MYT have a steep hill to climb to get back their tarnished reputation but they still have a lot of valuable assets that are making money. Our problem has been a lack of effective financial control and poor leadership, not a poor performing collection of companies.
The banks are the best endorsement of the health of the underlying business, they would not be lending money to a company they thought would not survive. No company, no interest payments, loan does not get repaid.
This is the first loss MYT have made, they know how to make money, they just lost their way for a while and have been damaged by the actions of a discredited auditing firm. Take a look at Andersens other clients, they are all having big problems.
I doubt you have seen the end of cut price holidays! brace yourself for some very aggressive selling. This is going to be a very diffucult year for every UK operator and some may not survive the winter, it would appear that MYT will survive! If your going to have problems now is the time to do it. I imagine some of our competitors were really hoping MYT would fall to ensure their own survival.
I have already made comment on the standard of reporting. There are good journalists out there but there are a lot more who are only interested in selling papers to those without the wit to tell the difference between news and speculation.
In conclusion Sky9, you are correct in so far as MYT have a long year ahead of them to get their house in order. If the problems were product related I would agree, not much hope for the future. But nearly all their problems seem to relate to poor financial contol and accounting practice, that being the case they have a good chance of making a strong come back as those issues are now being addressed very publicly. The share holders meeting in March should be fun, I might even go this year.