MyTravel likely to exceed 150m cost savings target

Global Travel Group Conference Special: A relentless cost-saving drive and sound business practice is hauling MyTravel back from the brink of disaster, the operator has said. Airtours Holidays sales and commercial director Steve Barrass told the Global Travel Group conference in Cyprus that the company – crippled by financial losses – was now “leaner and fitter” following an overhaul of the business. Barrass, the first MyTravel senior executive to speak publicly on the crisis, also dismissed accusations that the current management team was light on tour operating experience and appeared to accuse the previous regime for making poor decisions. “People might not be tour operators at a senior level but they are good businessmen,” he said. “We had forgotten good business discipline – such as writing things down. Those common practices are now in place. We are already a leaner and fitter business.” MyTravel will continue to be relentless in its cash management with targeted cost savings of 150 million pounds likely to be exceeded, he added. And in a thinly-veiled swipe at the previous board – who were regarded as experienced tour operators – Barrass added: “There was a management team here and the (financial) results are well known.” During an hour-long assessment of the business, Barrass said MyTravel’s German operation, FTi, was the biggest drain on cash, swallowing a staggering £398 million. “We were going to build FTi into a serious player. The attitude was to go and buy more aircraft and secure more beds,” he told delegates. “But the German economy then started to look a real mess.” Asked if he trusted his Plc bosses and their strategy, Barrass said: “Tim Byrne (chief executive) and David Crossland (chairman) were far removed from the operational side of the business and from the product delivery. But you trust your bosses. I could not have worked for someone I did not trust.” When the full extent of the losses became clear, the key objective was to change from a fixed cost to a flexible cost base, he went on. “David Crossland saw opportunities to buy beds and aircraft at cheap rates but when you are tied into beds you have to fill them. Airtours was not allowed to tour operate properly,” he told the conference. “You will not survive unless you move to a flexible cost base and we will keep reducing our bed stock so we can adapt to the patterns of the industry.” Earlier, Barrass denied the Civil Aviation Authority had been too lenient in agreeing a bond, insisting constant dialogue has convinced CAA bosses that MyTravel was on a sound financial footing. Among the lessons learned from the turmoil, he added, was how to save money. From thinking nothing of staying in The Grosvenor Hotel, staff on company business now share rooms in Travelodge’s, revealed Barrass. “You cannot imagine how much money you waste until you are in this situation,” he told the conference. Report by Steve Jones