Airtours annual general meeting statement (in full)
ANNUAL GENERAL MEETING STATEMENT
7 February 2002
AIRTOURS plc
Significant improvement in summer 2002 bookings run rates since Christmas.
Less holidays left to sell for winter 2001/02 and summer 2002 than last year.
Flexibility to change capacity to match demand.
Average selling prices ahead of last year for all seasons on sale.
Strong North American cruise bookings continue in TSI’s peak season.
David Crossland to retire in November 2002.
Eric Sanderson to become non-executive Chairman thereafter.
MyTravel.com a major success in advance of marketing spend, more than 27,000 bookings taken.
Commenting on the trading position and on David Crossland’s decision to retire, Tim Byrne, Chief Executive of Airtours plc, said:
“As we said when we reported last year’s results in November, growth this year will be challenging. The trading conditions we have seen since then give us no reason to change our view at this time. The improvement in summer bookings seen since Christmas was as expected. We continue to actively manage our capacity in response to the trends in customer demand, particularly as further market research we have carried out suggests that customers, in all markets, will book their holidays later this year.
As a consequence of a poor first quarter following 11 September, we will see significantly increased losses for the first half of this financial year. Whilst it is still early in the booking cycle, we believe supply and demand will be in line in our major markets and we continue to be cautiously optimistic for the full year. The actions we have taken in respect of overhead costs and the continued improvement of markets suggest a very positive outlook thereafter. In addition, we are very pleased with the response of our customers to the launch of the MyTravel.com website and the opening of the initial wave of MyTravel stores.
The success of the Group and its strength are a testament to David Crossland’s skills as a tour operator and as an inspiration to his management team. Under David’s Chairmanship, I have, as Chief Executive, had his full support in developing the business further. I thank David for this and look forward to his continued support until his retirement in November. I am confident that this team, under my leadership, will continue the tradition of profitable growth that David has established.”
David Crossland said:
“I have been in the travel industry for 40 years, I purchased the Company over 30 years ago and have been Chairman of Airtours plc for the past 15 years. I believe it is now the right time to hand over to both Tim Byrne and Eric Sanderson.
Our Group is in great shape having just delivered record profits last year and I’m pleased to confirm that I have no current intention of reducing my existing shareholding in the Company to any material extent.
We started to deal with my planned succession by splitting the role of Chairman and CEO 15 months ago. Tim Byrne, who was appointed Chief Executive in November 2000 has built what I believe is the best management team in travel anywhere in the world. Eric Sanderson will become the non-executive Chairman in November. He knows the Group and our industry very well, has great experience and, I believe, will make an outstanding Chairman.
It goes without saying that I will be sad to leave both the Group and the travel industry, but I am immensely proud of what all of us who work for Airtours plc have achieved. Our most important successes have been to take the number of people employed from 2 in 1972 to 27,000 today and profits from £2,000 in 1972 to £147m last year.
But we’ve only just begun. Travel is a growth industry. In Europe alone, the number of package holidays sold has increased from 25 million in 1990 to 60 million in 2000 and is expected to rise to 100 million in 2010. We are in an ideal position being one of the most profitable travel businesses in the world. Our philosophy is very simple, we aim to be the best holiday Group to travel with, to work for and to invest in. We have great people and great technology and I am convinced that the future is going to be even more exciting than the past.”
TRADING UPDATE
The Airtours Group
We have seen, as anticipated, an improvement in charter bookings in all our markets since Christmas. Capacity for winter 2001/02 has been reduced to equal the demand that we are seeing in each market place. In total, average selling prices for winter are 3% ahead of last year, load factors are in line with last year and we have less holidays left to sell than at this point last year.
For summer 2002, we continue to flex our capacity to match demand in each individual market. We have seen strong improvements in demand in all our major markets since Christmas. Average selling prices are 1% ahead and, again, we have less holidays left to sell than at this time last year.
UK
|
|
Summer 2002 |
Winter 2001/02 |
|
|
Charter bookings |
Charter bookings |
|
Position at 27 November 2001 |
88% |
93% |
|
Position at 30 January |
91% |
95% |
|
Trading 27 December – 30 January |
96% |
107% |
Charter bookings for both winter 2001/02 and summer 2002 have improved since November, with charter bookings for winter now at 95% of the prior year and charter bookings for the summer at some 91% of last year’s level. The post Christmas booking season started well and we continue to flex capacity to equal the demand in the market place.
As we indicated in November, we believe we are seeing a deferral of booking decisions for summer 2002 and in particular for high season departures. However, with less holidays to sell for both seasons than at this point last year and retaining significant operational flexibility, we believe we are well positioned in this market. Average selling prices for winter 2001 are broadly similar to last year. Average selling prices for summer 2002 are 3% below last year’s level, however they have improved in trading post Christmas.
Northern Europe
|
|
Summer 2002 |
Winter 2001/02 |
|
|
Charter bookings |
Charter bookings |
|
Position at 27 November 2001 |
52% |
83% |
|
Position at 30 January |
68% |
82% |
|
Trading 27 December – 30 January |
87% |
83% |
Capacity in Northern Europe had already been reduced to match market conditions and the booking trends post Christmas have been in line with our expectations. Cumulative charter bookings for winter 2001/02 are at 82% of last year’s level, similar to that announced in November, whilst summer charter bookings have improved to 68% of last year’s level. We have less holidays left to sell than at this time last year, for both seasons on sale and are holding selling prices 7% ahead, again for both winter and summer seasons.
On 20 December 2001 the Group sold three first generation, widebody A300 aircraft formerly based in Scandinavia. This sale reduced the charter capacity of our Northern European airline by 15%.
Germany
|
|
Summer 2002 |
Winter 2001/02 |
|
|
Charter bookings |
Charter bookings |
|
Position at 27 November 2001 |
not on sale |
29% |
|
Position at 30 January |
35% |
28% |
|
Trading 27 December – 30 January |
52% |
40% |
We have continued our restructuring programme in FTi, reducing committed capacity for winter 2001/02 dramatically and increasing average selling prices by 33%. We have less holidays left to sell than at this point last year but retain the flexibility to add capacity through uncommitted seats should profitable demand increase. Brochures for summer 2002 are now on sale with capacity reduced to equal anticipated demand in this market and average selling prices increased by 31%. As anticipated, the volumes in our modular business to the USA have not recovered to last year’s levels.
As a result of management actions taken to reduce the risk profile of the business and remove costs, we expect our losses in Germany to reduce in the current year, despite these difficult trading conditions.
North America
|
|
Summer 2002 |
Winter 2001/02 |
|
|
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