THE industry has reacted with shock to news MyTravel
will post a second half operating loss for the first time.
The Civil Aviation Authority and the banks were said
to be planning an emergency meeting following a shareholder
circular blaming a poor end to summer trading and more
conservative accounting for the loss.
Sources said it was the first time they knew of one of
the big four losing cash in the second half – the period when mass-market
operators make their money.
“This is incredibly unusual. Everyone makes profit in
the summer to offset winter losses,” said one operator.
Analysts described the report as “unbelievable”. “It
is now questionable whether it will make it through the winter,” said one.
The circular also made a plea for support for the
disposals of its US cruise business, US consolidator and hotel distribution
business World Choice Travel and the US car rental company Auto Europe, now in
the process of being sold to Soros Private Equity Investors for £50.9 million.
MyTravel has identified other companies for disposal
if these are unsuccessful.
Days before the circular, chairman Eric Sanderson told
Travel Weekly: “There are no plans to sell the Canadian or Scandinavian
businesses.
“There is also no pressure to sell the UK specialist
operators – they fit well in the range of businesses we have.”
The circular warned cash flow was at “significant
risk” short term due to high fixed costs and debts. Sanderson added: “Beyond 12
months, whether or not the continuing MyTravel Group will have sufficient
working capital will remain subject to significant uncertainty.”
Three months ago, MyTravel claimed the second half
would end up on a par with 2002, but since then sales have weakened with more
late bookings, resulting in lower margins.