MYTRAVEL has
announced it is to scrap its cruise division at a loss of £16 million, as part
of its wider cost-cutting strategy.
The
beleaguered operator is axeing its Sun Cruises business and passing over the
operation of its three ships, Carousel, Sunbird and Sundream to Cypriot cruise
and hotel group Louis.
Thomson
Cruises has announced it will lease Sunbird as new ship Thomson Destiny from
next summer in Palma. This means Thomson will now operate a cruise fleet of
four ships including Spirit, Emerald and Celebration, running cruises to 90
ports.
Meanwhile, existing
itineraries for MyTravel’s ships will continue this summer as planned but under
the Louis banner. The sale will not affect passengers already booked, a
spokeswoman said.
The assets
are valued at £18 million, of which MyTravel will gain proceeds of £1.5 million
after costs, having written off £16 million for its current financial year. The
operator will receive $2 million at completion, before costs. A further $14
million will be payable over the period to 2005, less outstanding money related
to Carousel.
In a
statement, MyTravel said: “The disposal of the ships will result in a
significant reduction in both the fixed costs and risk associated with cruise
ship operations.”
Sundream
will sail as planned until September 28, Sunbird up until January 15, 2005 and
Carousel up until May 2005. Its Seawing vessel is due to leave the fleet at the
end of this summer.
Chief
executive Peter McHugh announced last month the company was evaluating its
cruise business as part of an overall strategic review designed to cut its
£672.6 million debt (Travel Weekly March 29).
Its three ships made an operating loss of £8 million
in the year to September 30, 2003.