MyTravel chief to pocket £1m after being forced to step down

The chief executive of the beleaguered holiday operator MyTravel is set to scoop at least £1m in compensation after he was yesterday forced to bow to shareholder pressure and step down.

Tim Byrne, who was on a two-year contract, will leave immediately after institutional investors mounted a campaign to call for his scalp. His departure marks a disastrous year for the group formerly known as Airtours, which has seen its market valuation collapse from £1.4bn to £385m.

David Crossland, the group's founder and chairman, also said he would postpone his retirement, planned for next month, in an attempt to get a grip on trading at Britain's biggest tour company. He will stay on for up to one year.

Mr Byrne's resignation comes one week after the company stunned the City with its second profits warning in four months and its fourth since he took the helm. The group, which has suffered from the fallout of last year's terrorist attacks, is forecast to make pre-tax profits of £90,000 for 2002, against £211m in 2000.

The departure of Mr Byrne met with a cagey response from analysts.

"I don't think it really solves anything," one analyst said. "As chairman, Mr Crossland still presided over all the decisions that got them into this mess."

Ian Rennardson, at Merrill Lynch, added: "The market is inevitably going to ask the question of whether the company is in play. It is a question of timing and price."

First Choice, the tour operator run by Peter Long, is the favourite to launch a takeover bid after its path was cleared on competition grounds by a European court ruling concerning a tie-up between the two groups earlier this year.

However, analysts said a bid was unlikely to emerge in the short term as any prospective bidder would be deterred by risks over MyTravel's current trading and turbulent market conditions.