Analysis: MyTravel woe prompts hiring of heavy PR hitter

Battered package tour firm MyTravel last week confirmed the appointment of an aviation industry big hitter to its reinstated top PR post.

Tour group MyTravel has attracted far more attention for its redundancies than its recruitment over recent months - but amid the cuts the company has announced it has made one appointment of huge PR significance.

Just two weeks after the company said it would be making 2,000 staff redundant, the group, formally known as Airtours, brought in Steven Olivant - director of corporate comms at airports group BAA- to fill its vacant director of comms post.

It was a distinct change of tack from a company that a year ago decided it no longer needed a director of communications and made the long-serving Anita McErlean's post redundant.

Since then, however, the company has been mauled in the business pages as it went through one reputational crisis after another. The days when it was the darling of its sector with a market cap of £1.2bn seem a distant memory for a company now worth just over £50m.

CEO Tim Byrne and other board members left last year after two profit warnings. Founder and ex-chairman David Crossland followed last month, and in the process of these departures the company restated profits for 2001, turning earnings of £62.3m into a loss of £72.8m.

There was more bad news to come, as new chief executive Peter McHugh was forced to admit winter bookings were four per cent down on last year.

Given the struggle to bring media and analysts back onside, MyTravel have decided they cannot do without top level PR representation.

The company refused to comment, but that was the view of one industry figure with close links to the company. He described how, over the last year, relations with the City have became increasingly strained as the board failed to grasp the importance of frank dealings with the financial media.

MyTravel's financial PR was contracted out to Brunswick late last year, but sources outside the agency stress that Brunswick should not be blamed for the damaging coverage.

As relations with the City media deteriorated, MyTravel appeared to adopt a bunker mentality - at least as far as financial PR was concerned. One journalist recalls that for several months after September 2002, MyTravel refused to answer corporate queries from the media.

This was acknowledged by the firm's struggling in-house team when one of its number told PRWeek at the time: 'We've missed having someone in that (comms director) role. We've had a difficult few months and our City PR has not been good. There is a need to appoint someone senior.'

Internally, relations with staff soured when the company announced its departed executives would receive compensation packages of £2.67m - a move portrayed in much of the media as a 'reward for failure'. To be fair, MyTravel had made the payout through clenched teeth and stressed it had done so to avoid 'protracted litigation costs'.

It should be stressed that, while PR was a factor in MyTravel's woes, these troubles were largely prompted by factors beyond the PROs' control.

Essentially, the company's ambitious targets for growth were going to be challenging, even in a healthy travel industry. After the September 11 attacks they became unattainable. With a 58-strong fleet of aircraft - larger than many national airlines - its overcapacity in a reduced market became a huge burden.

That said, it is hard to overstate the size of the challenge facing Olivant and the new board members, but many onlookers say the company is showing signs of learning from its mistakes and is attempting to be more open in its communications.

One industry onlooker believes Olivant will provide a vital channel of communication between the board and Brunswick, to help rebuild the trust of City media and analysts. He will also be helped by the fact that he is working for a new top management team, which has stressed that its top priority is to restore profitability.

FT leisure industries correspondent Matthew Garrahan detects 'a sense that the company is taking a more prudent approach to its finances now that it has changed management', and on the communications side: 'You no longer get the feeling they consider themselves under siege.'

Garrahan says the new director of comms faces a difficult task given the battering the company has received in recent months and the way fallout from war is affecting the travel industry, 'but not an impossible one'.

Indeed, even some of those critical of the way MyTravel has handled its PR believe that at operating level, it is still a very good company.

And despite the company's corporate PR woe, the in-house team seems to have gained the respect of those in the travel and tourism sector for ensuring the negative City coverage does not spill over into the company's consumer and trade press work.

For a firm operating in such a foul trading environment, the financial PR aspect to its communications is vital to restoring shareholder value.

Olivant has a job on his hands.

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