| Journal: TWUK | Section: |
| Title: | Issue Date: 29/05/00 |
| Author: | Page Number: 3 |
| Copyright: Other |
Operator pulls out of time-share venture
Airtours sees winter losses soar to £62m
Report by TANYAJEFFERIES
POOR trading and heavy discounting over the millennium has landed Airtours with a £61.9m loss for the winter season – more than double the deficit in the same period last year.The half-year results were accompanied by the news that Airtours is abandoning its bid to enter the time-share business and plans to sell its existing sites in the Canaries and Florida.
Managing director Tim Byrne said: “Everybody misjudged the millennium. We and everyone else in the leisure industry saw it as a special time. We had staff and airlines and hoteliers looking for extra money and had prices that customers were not prepared to meet.”
Byrne pointed out there had been growth in summer 2000 bookings, which the company claims are 15% up in the UK and 9% up across the whole group.
He denied the latest results put extra pressure on Airtours to conclude a tie-up with another operator. He confirmed the company was still in talks with Germany’s LTU but refused to comment on whether it was seeking a deal with C&N Touristic, which recently failed to acquire Thomson.
Meanwhile, Byrne admitted that Airtours’ £30m investment in the time-share market had failed to achieve the growth it had sought.
Its site in Gran Canaria had been profitable but the operation in Florida has made a loss due to high land costs and it had proved difficult to find new sites, he explained.
“We didn’t want to have a small operation that would distract management attention,” he said.
Meanwhile, the Vacation Ownership office in Watford has been closed and former managing director John McDonald is now running the site in the Canaries on a freelance basis.
Byrne: blamed heavy discounting in the millennium for its deficit
Airtours’ half-year results to March 31
n Seasonal pre-tax loss more than doubles from £27.3m to £61.9m.
n Turnover up by 12% to £1,621.5m.
n UK seasonal loss remains steady at £25.3m.
n Loss from joint venture in German operator FTi deepens from £4m to £14.3m.
n Increased losses from European and North American operations.
n Time-share operations are being downsized with the aim of making a “controlled exit”.
n Bookings for summer 2000 are 9% ahead across the group, 15% up in the UK and 74% up in Germany.
Byrne: blamed heavy discounting in the millennium for its deficit