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Friday, 22 October 2010 02:21 - - {{hitsCtrl.values.hits}}
THE financial head of Britain’s biggest tour operator has quit after the firm discovered it was owed millions by customers who failed to pay in full for their holidays.
TUI Travel, which owns Thompson and First Choice, said it stumbled upon the £117m worth of unpaid bills during a company audit.
It said the balances were “irrecoverable” and would have to be written off.
Following the alarming discovery, Tui Travel’s Chief Financial Officer Paul Botwell announced he was resigning.
The company meanwhile had to republish its 2009 results, wiping £42m from the annual operating profit figure, taking it to £401m.
According to Tui Travel, the oversight came about as the company integrated IT systems following its merger with First Choice in 2007.
“It is now clear that at the time of merger there were weaknesses in the legacy systems we chose to use in the TUI UK business,” said the group’s Chief Executive Peter Long.
“Despite the fact that this situation had built up over a number of years, Paul is behaving honourably and I am disappointed that he will be leaving the Group.” Tui Travel, controlled by Germany’s TUI AG said that it had already written off £29m in August, but the ongoing audit discovered a further £88m of irrecoverable balances.
Despite the impact of the unaccounted for loss, Tui Travel said it remained confident this year’s results would be in line with expectations and that net debt would be lower than previously indicated.
Earlier this month the group reported that holiday bookings for winter and next summer had picked up after a slow summer.
It said the demise of smaller travel operators such as Goldtrail and Kiss Flights had been beneficial to its business as holidaymakers sought the security of a larger firm. (Sky News Online)
