| Journal: TWUK | Section: |
| Title: | Issue Date: 17/07/00 |
| Author: | Page Number: 3 |
| Copyright: Other |
Airtours pins hopes on UK as overseas markets take a dive
Steve Jones looks at the reasons behind Airtours’ profits warning
AIRTOURS is banking on the UK to save its profits for the year after dire performances in key overseasmarkets.Scandinavia, Germany, France, Holland and Belgium have all suffered. This has sparked Airtours’ first profits warning since 1995.
It has led to the operator winding down its French and Belgium businesses and reducing capacity and costs elsewhere in Europe.
Group managing director Tim Byrne said the position was unavoidable and admitted it is now relying on the UK to perform.
Despite stressing that sales are 18% up on last year with this year’s prices on a par with 1999, Byrne said there is still a risk as the industry moves into the critical peak season.
“There is nervousness but we are confident of a good year,” he said.
“Prices after discounts are the same as last year and sales are well up.”
He denied industry claims that it had piled on too much capacity and would resort to widespread heavy discounting.
“I can’t guarantee it will be a good year but the rate of sale tells us we will do OK” he said. “The recent bad weather in the UK is also going to help.”
In Scandinavia, Byrne said a disastrous millennium, coupled with the loss of duty-free and increased fuel costs, would severely dent profits, which hit record levels last year. “Of all our markets, Scandinavia probably suffered the most,” he said.
“The loss of duty-free and rising fuel costs has probably cost us £10m and to reclaim that we raised prices which reduced demand.”
Dismal: Byrne admits poor performance in overseas countries such as Turkey have left the operator reliant on the UK market