Menu cuts staff after quarterly loss cuts staff after quarterly loss

Reflecting the impact of the terrorist attacks in the US and the demise of Ansett, has cut staff and trimmed back its floorspace to reduce costs by the end of year.

On the back of the September 11 terrorist attacks and Ansett's collapse, the online travel group reported gross revenues of $32 million for its September quarter.

In the company's annual results, released to the market on September 10, forecast "a small EBITDA loss in this quarter".

But the September quarter reported an EDITDA (earnings before interest, tax, depreciation and amortisation) of more than $760,000, considerably more than the company had forecast in its annual results.

CEO David Tonkin said the company wanted to get the latest financial information to shareholders as soon as possible in light of the two events impacting the travel industry.

"Revenues in August were disappointing and the events of September 11 and 14 have resulted in a decrease in the company's forward travel bookings plus a number of cancellations to long-haul destinations. Consequently, has incurred an EBITDA loss of $763,000.", in light of an expected downturn in activity, said it made the necessary adjustments in its cost base, including the redundancies of 23 employees and the release of 25 per cent of the company's floorspace from November.

Total costs for November and December will be reduced by 36 per cent compared to costs in July and August 2001.

Tonkin would not say whether company revenue for the current financial year would match its previous year for which it reported annual revenue of $135 million.

"With the uncertainty in the travel industry globally, it is now difficult to estimate accurately the longer-term impact through the rest of fiscal 2002. The impact on tourism within the Asia-Pacific region and the rest of the world will most likely be medium-term, but it will depend upon ongoing activity," he said.

However, Tonkin said increases in security and insurance costs for airlines will positively impact's business as the Internet will be seen as a way to lower the cost of distribution, putting in an excellent position in the recovery phase.

"At the end of the September 2001, our consolidated cash holding was $11.1 million, and our steady reduction in costs over the past few quarters have proved to be timely," Tonkin said. "Our short-term focus will be on conserving cash while maintaining a focus on online sales, so that we are well placed to grow the company in the near future."

Also the activity of its service, which concentrates on tourism products such as hotels and tickets, has exceeded expectations and is expected to continue to do so, according to Tonkin.,'s Japanese 16 per cent owned subsidiary reported a maiden monthly profit in August.

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