Britain's second-biggest tour operator Airtours awarded its executive directors bonuses worth more than £2m last year, doubling the executive directors' pay bill, despite the uncertain outlook for the travel industry following 11 September.
David Crossland, the chairman, admitted in Airtours's annual report and accounts that because of last year's terrorist attacks the prospects for the industry remained "uncertain" and that growth in 2002 would be "challenging".
Yet the accounts revealed that the Airtours founder was awarded a £402,000 bonus in the year to 30 September 2001, nearly doubling his total remuneration to just over £1m.
Tim Byrne, the chief executive, received a bonus worth £325,000, increasing his pay package to £902,000. The increase from £440,000 in 2000 was helped by a £75,000 pay rise after he was promoted to managing director.
The finance director, David Jardine, and the aviation division chairman, Mike Lee, both received bonus payments of £225,000, which increased their packages to £688,000 and £768,000 respectively. In total, the company's executive directors received £5.86m compared with £2.77m a year earlier.
A spokeswoman for the company, which will be renamed My Travel later this year, said the increases reflected the absence of bonuses in 2000 – "a bad year". However, 2001 was also a bad year for 2,800 Airtours employees – roughly 10 per cent of the company's workforce – who lost their jobs.
The initial bout of redundancies was part of a corporate restructuring which followed a series of profit warnings. The second round, 1,600 jobs in total, mirrored industry-wide redundancies implemented to cope with the downturn that accompanied the global loss of confidence in flying.
Analysts have slashed Airtours's 2002 forecasts by a third and now expect the group to make a pre-tax profit after e-commerce costs but before goodwill of £125m, down from £180m. This compared with a pre-tax profit, before exceptionals, e-commerce costs and goodwill, of £145m last year, which included a £11.4m hit from 11 September.
One analyst said: "Generally the outlook is uncertain for obvious reasons. Current bookings are below last year's levels." Last month, Airtours said that UK bookings for summer 2002 were 12 per cent down on last year's levels, although the key January to February booking period is yet to come.
Airtours, in common with its rivals, slashed winter capacity by 15 per cent and has reduced the number of summer holidays on offer by 14 per cent. Its shares rose 5.5p to 255p, continuing a rally since a low of 110p following the terrorist attacks.Reuse content