Budget Travel forecasts 30% drop in business

BUDGET TRAVEL, Ireland’s biggest package holiday operator, expects to record a 30 per cent decline in business volumes this year as a result of the recession.

This compares with an 11 per cent fall in passenger numbers in 2008, as consumer demand began to soften.

A spokesman for Budget Travel said the company expects to carry between 170,000 and 200,000 passengers in 2009.

This would represent a decline of almost one-third on last year and would mirror a decline in the Irish package holiday market as a whole this year.

“This year is going to be very tough but the industry generally has significantly reduced capacity in response to this,” he said.

The spokesman said staff in Budget’s company-owned retail shops were placed on a three-day week earlier this year as part of a number of measures to cut costs.

“We have been aggressively managing our cost base in anticipation of reduced volumes,” he added.

Accounts just filed for Budget, which is owned by Primera Travel Group Scandinavia, show that its profit rose marginally last year in spite of an fall in passenger numbers and a decline in revenues.

Its pretax profit rose to €4.6 million in the 12 months to the end of December 2008, up from €4.3 million in the previous year.

Revenues declined to €147.6 million from €159.7 million. “Sales generally slowed down from October onwards,” the directors’ report noted. “This did not impact the year’s result unduly as over 80 per cent of Budget Travel’s business derives from summer holidays.”

The “cost of goods sold” fell by almost €13 million to €127.6 million, while its marketing and administration costs were also down.

Budget said the average number of seats filled on aircraft was 95.2 per cent last year, down from 96.8 per cent in 2007.

No final dividend was paid to its parent group.

The accounts note that an €11.4 million bond is lodged with the Commission for Aviation Regulation to cover its commitment as a licensed tour operator and travel agent.