MyTravel emerges from the clouds

TOUR operator MyTravel, which nearly went bust after a £50m hole was found in its accounts in 2002, is seeing early glimmers of recovery.

In December, the former Airtours persuaded lenders to swap £800m of debt for shares in the company.

At today's annual meeting, chief executive Peter McHugh told investors he had been encouraged by bookings for summer. He has cut the number of holidays available and now has 'significantly fewer' holidays left to sell than at this time last year.

The company warned that high oil prices are making its job harder, but said it had purchased fuel at about $60 a barrel of Brent crude, in order to 'protect against any extraordinary changes' over the rest of the year.

It is also charging a fuel supplement, including £15 for a short-haul flight.

In a trading statement ahead of its annual meeting in London, MyTravel said its figures will be affected by the Asian tsunami, with refunds and the cost of bringing holidaymakers home affecting results by £12m.

Much of this figure - £10m - related to northern Europe after its Scandinavian division stopped operating to Phuket in January.

As part of the overhaul, MyTravel has reduced capacity for this year and made improvements to its products. Cost cuts have also been made.

Chief executive Peter McHugh added: 'We will continue to look to be more efficient, but there are no major redundancy programmes planned.'

MyTravel plunged into financial crisis after its operations proved too inflexible to cope with the downturn in the travel market.

The company responded by cutting back capacity and axing thousands of jobs, before completing the life-saving debt-for-equity swap on New Year's Eve.