Holiday website On The Beach reckons it missed out on more than £1m in profits after the collapse of airline Monarch forced seat prices up over the winter.
Chief executive Simon Cooper said the demise of Monarch, Britain’s fifth biggest airline, caused a reduction in the number of airline seats available to holidaymakers and so pushed the price of flights up.
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He suggested those searching for a short break in February this year would have paid “twice as much” as the same month the prior year.
He claimed this had deterred a slew of passengers and meant the loss of a potential £1.1m in revenue the company would have expected to receive had Monarch, whose collapse in October last year led to the largest repatriation by the Government since Dunkirk, remained solvent.
“The pricing of flights prior to Monarch’s failure was about 15pc down year-on-year but after it, prices were up about 80pc year-on-year which was a massive swing for winter travel,” he said.
Mr Cooper said seat numbers had recovered across the airline industry meaning summer price rises were set to be far more modest and so he expected a strong season which would mean the company hitting its full-year guidance.
Sales rose nearly a fifth to £45.3m thanks to a large 24pc rise in visitors to its site, hitting 34.1m in the six months to March 31. This helped pre-tax profits rise 9pc to £10.7m.
But shares in the company fell 16pc to 545p on the back of the results, something Mr Cooper dismissed as profit taking by investors after the stock reached an all-time high of 615p yesterday.
Analysts at Peel Hunt said the Monarch collapse had “continued to impact seat pricing and, consequently, reduced demand”.
“The bottom line impact of this has been magnified by an increased level of marketing investment ‘to build trading momentum into the start of H2’,” Peel Hunt said. The broker cut its profit forecasts for 2018, 2019 and 2020 on the back of the update.
Mr Cooper said the rise in marketing spend wasn’t a reaction to the fallout from Monarch but instead reflected its recent acquisition of holiday website Sunshine, which he said needed investment.