All of the world's leading tour operators are being hit by the current wave of global instability and yesterday Airtours announced that it has had to cut 1'600 jobs after the US terror attacks, including 200 in the UK. The UK's largest package holiday tour operator with a very high profile in the Balearics, having bought Europe's largest resort in Alcudia, the Bellevue just two years ago, is however confident that its “operational flexibility” means it can be back on course for next summer. But Richard Finch, a travel sector analyst at Williams de Broe, is sceptical that such a feat can be achieved at no extra costs. He says that while he recognises the need to move away from the “bucket and spade” brand that Airtours was, there are other areas of the company's business that investors should be more interested in. These include its performance in Germany, where it has posted narrowing losses of £24.5m. The Airtours group yesterday posted record full-year operational profits of £147.4m, up by 57% on last year, although its reporting year ended just three weeks after the attacks. Chief executive Tim Byrne says that it has already deliberately undercut its supply of holidays for Winter 2001, cutting back holidays by 15% when bookings are only down 8%. Airtours yesterday warned its outlook was uncertain in the coming months and that it would be rebranding its entire operation to MyTravel. Mr Byrne also said passengers could expect to pay between £5 and £10 more for an average £500 holiday this year as a result of the costs for increased aviation insurance and higher security at airports being passed onto passengers when they book. In the UK, turnover increased by 15 per cent to £2.7bn as more people took charter holidays, but operating profits fell from £97.2m to £92.4m as September 11 cost the group £7.4m. Since the terrorist attacks on the US the group has cut 1'600 staff, mainly in the US, in order to reduce costs. Mr Byrne said the cuts were a direct result of September 11, but said he did not anticipate further cuts in the new financial year. These cuts have come on top of 1'200 redundancies the group announced last year as a result of efficiency programmes and restructuring. Mr Bryne said that despite the current difficulties in the US, the group's US business had been performing well, particularly in its cruise distribution business, which sells but does not operate cruise holidays.


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