ACCOUNTS JUST filed for travel agent Budget Travel show that it paid a hefty €60.5 million dividend to its then parent group TUI before its sale to Primera Travel Group last October. Primera is owned by Icelandic businessman Andri Mar Engolfsson.
TUI sold Budget in return for the EU Competition Commission granting approval for its global merger with First Choice in June 2007.
"Of the two Irish companies, Budget Travel had a lesser operational dependency on staff and systems in the UK and could be more easily and quickly sold," the accounts for the year to the end of December 2007 state.
This process, it seems, did not go entirely smoothly. "The merger activities, followed by the due diligence exercise associated with selling the company, took a toll on Budget Travel's operations in terms of management focus," the directors' report notes. "However, staff and management reaction to the sale is positive. Budget Travel is now actively exploring opportunities for synergies with other Primera group companies."
It added that Budget would no longer be constrained in targeting the ski and city breaks markets and in selling charter packages to America and Asia.
The sun didn't shine on all parts of Budget's business in 2007. The company carried 5 per cent fewer passengers than in 2006 as part of a planned capacity reduction aimed at cutting unprofitable routes.
Its load factor declined to 96.8 per cent from 97.1 per cent. "Ryanair and Aer Lingus both introduced daily flights to Salou and Majorca, respectively, thus increasing the level of competition on these popular routes."
Revenues fell by 2.9 per cent to €159.7 million from €164.4 million in 2006.
On the plus side, a €13 million reduction in the cost of goods sold helped Budget post a profit of €3.8 million, compared to a loss of €1.7 million in 2006. "The implementation of a new reservation system in 2008 will offer flexibility and choice to customers," the accounts state.
"This will allow Budget Travel to compete more effectively in the marketplace and to offer a wider variety of holidays to customers," the accounts state.
