| Journal: TWUK | Section: |
| Title: | Issue Date: 17/07/00 |
| Author: | Page Number: 3 |
| Copyright: Other |
Freefall: analysts have warned a further profits slide is possible
Operator under fire from City
AIRTOURS is under pressure from the City for the first time in years after analysts wiped almost a third off the operator’s projected profits for 2000.Shares dipped 53p to 254p on news of the profits warning, its first since overcapacity wrecked the market in 1995.
Analysts warned that a further slide was inevitable if the UK high season is poor.
“The downgrading of profits is only based on Airtours’ European operations, not the UK,” said one. “It is banking heavily on a decent performance in the UK but that is far from certain. There is a fair amount of capacity left in August.”
Another analyst said: “Airtours has made a sizeable investment in Europe and it is not paying dividends. In Germany it has tried to replicate the UK model which has not worked.
“FTi is haemorrhaging and the reason for buying 100% is so Airtours has full control, strips out the costs and cuts capacity.”
The fall in the company’s value could open the way for a bid from one of the major European players, probably C&N.
However, an analyst said: “Airtours is vulnerable but it has loyal shareholders. It would be harder to take over than Thomson.”