MyTravel

6,000 jobs
Number of planned job losses

Announcement Date

20 December 2004

Employment effect (start)

Foreseen end date

Description

MyTravel, one of the UK's biggest travel companies, has been locked in a legal battle with its bondholders over the terms of the £800 million debt for equity swap, which the company said it needed to implement by the end of 2005 in order to survive. MyTravel's bondholders - reportedly including Societe Générale, Lehman Brothers and funds Fidelity Investments and New Star were worried about the threat to cut the value of funds' bond holdings in general. MyTravel ran into difficulties following accounting problems and a downturn in the travel industry. It reported a pre-tax loss of £190 million in the 13 months to 31 October 2004. During that year, losses at MyTravel's British unit offset operating profits in its North American divisions, but the company said it expected to make an overall operating profit across all divisions by 2006. Worldwide staffing levels have been cut from 22,000 to 16,000.

MyTravel declared on 23 June 2005 that it was 'back on a normal footing' with rapidly rising sales and steady finances after a turbulent couple of years when the tour group nearly went out of business. The company has reduced its UK aircraft fleet from 33 to 23, stopped operating its four cruise ships and cut the proportion of its accommodation guaranteed for the UK winter season from 31% to 19%. Around £12.5 million was spent on restructuring the business in the first half of 2005. On 23 June 2005, management said it had agreed to sell its stakes in joint ventures Tenerife Sol and Hotetur for £38.5 million.

Sources

• 20 December 2004: The Guardian
• 24 June 2005: The Guardian