Travel tycoon fights to prevent ruin as riches turn to rags

Millionaire who started out making coffee in local shop will spend this weekend struggling to salvage empire he created

David Crossland, chairman and founder of the package holiday giant MyTravel, famously failed his maths O-level nine times.

Perhaps that crossed the minds of shareholders this week when the company, formerly known as Airtours, revealed £50m black hole in its accounts. Although the company moved quickly to reassure its customers, the once-mighty travel empire's future looks depressingly bleak.

Nearly £300m has been wiped off the company's stockmarket value in the past two days, with investors quick to show their mistrust of management after a disastrous year that has seen the group notch up three profit warnings since May. All of this leaves Crossland in a tight spot.

By rights, Crossland, 55, should have been spending the past couple of weeks deciding what clothes to pack for a round-the-world trip with his wife next month. The Lancastrian, who now lives in Jersey, had planned on retiring next month after more than 40 years in the business. Instead, the renowned workaholic was obliged to postpone the journey and catch the next plane to Manchester, home to MyTravel's headquarters.

His first task was to sack Tim Byrne, the company's chief executive. His second was to issue a profits warning, alerting investors to the ominous fact that the group's auditors, Deloitte & Touche, had authorised a crackdown on its accounts to the tune of £15m.

Fallout from the blow dealt by 11 September to the travel industry meant that MyTravel was forced to sell the dregs of its summer holiday programme at unsustainably low prices. This had eaten into profits and, until then, had gone practically unnoticed.

In an effort to placate increasingly irate shareholders, Crossland agreed to postpone his retirement for up to a year. The son of a fruit-and-veg salesman from Burnley must have felt that his rags-to-riches tale was in severe danger of coming to a distinctly unhappy end.

Despite leaving school at 16 with just three O-levels, Crossland went from working in his local travel agents stamping brochures and making coffee to become the country's biggest tour operator.

His first break came in 1971, in the form of an unexpected Christmas present. The then 25-year-old was negotiating on behalf of his employer, Travelplan, to buy a two-shop agency owned by Pendle Travel. On learning that Crossland intended to leave his employer, the sellers phoned him on Christmas Eve and told him they had decided to sell to him instead. They even lent him half of the asking price, leaving Crossland to sweet-talk the manager at Barclays Bank for the rest. During the next decade, he bought another 20 shops, before eventually selling the chain of agencies and floating Airtours as a holiday company on the London Stock Exchange in 1987.

It was in 1991, shortly after the Gulf War, that Crossland landed his second lucky break. The collapse of International Leisure Group (also known as Intasun), run by Crossland's flamboyant rival Harry Goodman, opened the way for Airtours to move in on the vacuum created in the market by the departure what had up until then been the number two holiday brand in the market.

Perhaps portentously, ILG, which had recently launched Air Europe, a new low-cost airline, had gone bust in the wake of military action against Iraq, as frightened holidaymakers stayed at home. MyTravel must now be lamenting what could turn out to be the biggest irony of Crossland's sorry tale – this month's debut of its own low-cost airline, MyTravelLite, apparently also on the heels of the firm's demise.

With some shareholders calling for his head, Crossland will have to call on the last vestiges of his reputation if his company is to have any chance of salvaging its fortunes.

A further 37 per cent slide in MyTravel's share price yesterday left its value at just £89m, compared to nearly £1.5bn earlier this year. Crossland, who has seen the value of his 10-per-cent stake fall to less than £9m from £37m earlier in the week, must be hoping his luck hasn't already run out.