Maintenance problems drag Inspirations to pounds 13m loss
Tuesday 24 December 1996
The denial scotched a rumour that Carlson, the US travel group, was poised to buy the outlets which it already manages in order to inject much-needed funds into Inspirations' balance sheet. A company spokesman said that, with net cash of pounds 42m, Inspirations had no trouble complying with the CAA's bonding requirements which insist on credit lines being available to get holidaymakers home in the event of a corporate crash.
The troubled holiday company has been in a tailspin since maintenance problems with its Caledonian Airways subsidiary in the summer caused delays and disruption valued yesterday at pounds 19.5m. Putting a figure on the damage finally drew a line under a disastrous three-month period for the company during which two profits warnings contributed to a halving in its share price.
Inspirations said it had struck a compensation deal with British Airways Engineering, the airline's maintenance arm which failed to deliver Inspirations' planes to an agreed timetable, causing disruption to the tour operator's summer schedule. BA will make a payment of pounds 1.6m to Caledonian and subscribe to preference shares worth pounds 4.4m in Inspirations.
BA said yesterday: "British Airways Engineering has acknowledged that there were occasions when engineering work had taken longer than anticipated but safety is paramount and neither Caledonian Airways nor British Airways would ever allow this safety to be compromised."
Inspirations shares closed yesterday 1p higher at 75.5p, above their recent low of 66.5p but well below the 152.5p reached in August.
The heavy loss recorded last year compared with a profit of pounds 7.7m in the 12 months to September 1995 and was struck from sharply higher sales of pounds 403.2m (pounds 356.1m). There was a loss per share of 27.7p (earnings of 18.4p) and no dividend is to be paid.
A spokesman said 1996 had got off to a good start and good trading had soon resumed after September's difficulties.
Inspirations' figures bring to an end a mixed reporting season for Britain's quoted holiday companies. Airtours profits took off with its share price but First Choice took the opportunity of appointing a new chief executive to slash its dividend by a quarter, despite reporting higher profits.
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