OPERATING REVIEW

Group Results

Pro forma

Geographic analysis of turnover 2005 2004 2004

6 months 6 months 6 months

to April to April to March

£m £m £m

UK 506.3 646.9 680.9

Northern Europe 358.1 363.7 387.3

North America 245.5 239.8 246.4

Group 1,109.9 1,250.4 1,314.6

Joint ventures 12.9 13.5 13.9

Group and share of joint ventures 1,122.8 1,263.9 1,328.5

Pro forma

Geographic analysis of operating results** 2005 2004 2004

6 months 6 months 6 months

to April to April to March

£m £m £m

UK (123.9) (148.5) (164.7)

Northern Europe 14.2 4.6 5.5

North America 23.1 17.7 9.5

Group (86.6) (126.2) (149.7)

Joint ventures and associates (1.2) (0.3) 0.1

Group and share of joint ventures and associates (87.8) (126.5) (149.6)

The results for the 6 months to April 2005 show a significant improvement over

the comparable prior year period despite an £11.7m adverse impact as a result of

the Indian Ocean tsunami and a significant increase in the cost of fuel.

Management calculates that movements in fuel prices have adversely impacted the

Group operating results in the 6 months to April 2005 by £17.5m when compared to

the 6 months to April 2004. This has been partially offset by a favourable

impact from foreign exchange movements which management calculates at £5.7m.

In the UK, we have reduced the winter operating loss before exceptional items

and goodwill to £123.9m, compared with a loss of £148.5m in the 6 months to

April 2004 (6 months to March 2004: loss of £164.7m). This improvement reflects

the actions we have taken to date to better align capacity with demand and to

improve the product offering. These actions have resulted in a higher

proportion of holidays being sold at full brochure prices and improved margins.

It also reflects further efficiency savings from our continued programme of

simplifying the business and reducing costs where possible. The improvements

have been achieved despite increases in fuel costs, which management calculates

adversely impacted the result by £7.7m, and a £1.7m adverse impact from the

Indian Ocean tsunami, partially offset by positive foreign currency movements,

which management calculates at £2.4m.

In Northern Europe, the winter operating profit before exceptional items and

goodwill increased to £14.2m, compared with £4.6m in the prior year (6 months to

March 2004: profit of £5.5m). The increase of £9.6m was achieved despite the

Indian Ocean tsunami, which adversely impacted operating results by £10.0m, and

the impact of increases in fuel costs, which management calculates adversely

impacted the results by £6.4m. These adverse impacts were mitigated by trading

improvements, rigorous cost control, including some £5.6m of one-off items, and

a £3.1m benefit from our having exited from the Dutch businesses.

In North America, we were able to maintain the good performance seen in the

prior winter period. The winter 2004/05 operating profit before exceptional

items and goodwill was £23.1m, compared with £17.7m in winter 2003/04 (6 months

to March 2004: £9.5m). The adverse impact of increases in fuel costs, which

management calculates at £3.4m, was offset by the favourable impact of foreign

currency movements, which management calculates at £3.1m, and the year on year

benefit of £3.4m from the disposal of loss-making businesses in the prior year.

Business segmentation

In addition to the geographic analysis of revenues and profitability, we have

provided some key financial data relating to the nature of the business. This

segmental analysis, across all geographic regions, breaks the businesses into

Risk and Non-Risk operations. Businesses are defined as Risk if the Group

either owns or has some financial commitment to the product (either aircraft or

hotel) prior to the customer booking. Our other businesses, where commitments

are made after the customer booking, are categorised as Non-Risk. These are

often referred to as independent travel.

The Risk business is further analysed between Mass Market and Focused. Focused

businesses specialise in a small number of destinations, or particular customer

segments or routes to market.

Pro forma

Business segment analysis of turnover 2005 2004 2004

6 months 6 months 6 months

to April to April to March

£m £m £m

Risk

Mass Market 667.1 782.3 825.3

Focused 264.4 267.3 275.3

Total Risk 931.5 1,049.6 1,100.6

Non-Risk 178.4 200.8 214.0

Group 1,109.9 1,250.4 1,314.6

Pro forma

Business segment analysis of operating results** 2005 2004 2004

6 months 6 months 6 months

to April to April to March

£m £m £m

Risk

Mass Market (95.9) (119.9) (126.2)

Focused 11.9 5.2 (9.4)

Total Risk (84.0) (114.7) (135.6)

Non-Risk 2.8 (4.3) (6.1)

Central costs (5.4) (7.2) (8.0)

Group (86.6) (126.2) (149.7)

A further breakdown of the 6 months to April 2005 turnover and operating

results ** by geographic region is included in Appendix 3, together with

details of the key ongoing businesses included in each of the segments.

Strategic Goals

Our goals continue to be to improve the performance of our package holiday

business by focusing on profitability rather than market share. We aim to

achieve an operating profit in all divisions by 2006 and industry standard

margins of 3.5% in the UK in 2007.

We aim to achieve this through the following actions:

• Having developed an effective management team, we will continue to focus

on improving the quality and performance of management and employees.

• Maintain a culture focused on improving productivity and efficiency. In

the 6 months to April 2005, we reduced Selling and marketing, General and

Administration (S,G&A) costs by £21.1m year on year.

• Strike the right balance between supply and demand, focusing on

profitability rather than market share, in the package holiday market.

• Ensure the quality of the products we offer.

• Continue to develop the ability to respond quickly to evolving consumer

attitudes and ensuring the relevance of our product.

• Improve the effectiveness and balance of our distribution.

• Leverage and expand our brands in the growing market for independent

travel.

Since the year end we have:

• Reduced the aircraft fleet from 44 to 36, with a reduction in the UK fleet

from 33 to 23.

• Transitioned more of our flying from short haul to medium and long haul.

In the UK, medium haul flying increased by 4% and long haul by 23%, and

these now constitute 70% of our total winter flying.

• Ceased to operate cruise ships in May 2005.

• Reduced the proportion of accommodation guaranteed for the UK winter

season from 31% last year to 19% this year.

During the period, we invested in our UK internet booking capabilities which

resulted in significant improvements to our product offering. According to

Hitwise, MyTravel was the 6th largest travel agency website in the UK during May

2005. Our Direct Holidays brand is currently taking up to 40% of its bookings

on the internet. In Northern Europe, we grew the proportion of bookings made

over the internet to 27% of the total, and we are currently taking up to 50% in

Norway.

Restructuring

During the period, the Group completed the restructuring of its balance sheet.

Trading in the new shares issued began on 31 December 2004 and the Company

rejoined the FTSE 250 index at the close of business on 18 March 2005. The

Company's A ordinary shares as well as the convertible preference shares will be

consolidated on a 30:1 basis expected to become effective at the close of

business on 8 July 2005. In the 6 months to April 2005, £20.5m of costs

associated with the restructuring were incurred, of which £12.4m has been

charged to the profit and loss account as exceptional finance charges and £8.1m

has been charged directly to the share premium account. These costs, together

with those charged in the 13 months to October 2004, bring the total cost of the

restructuring to £41m as previously estimated.

Hotel Disposals

MyTravel today announced that it has contracted to sell its interests in joint

venture undertakings Hotetur and Tenerife Sol.

Hotetur is a Palma-based resort hotel group in which MyTravel has a 50%

shareholding which it acquired in September 2000. This interest, together with

a loan from MyTravel to Hotetur, is being sold to Teinver for a total

consideration of €29m (£19.3m). Teinver is the owner of the remaining 50%

interest in Hotetur.

The consideration comprises €19m (£12.7m) cash on completion, €4m (£2.6m) cash

receivable on 31 December 2005 and €6m (£4.0m) by way of credits which may be

used over a period of three years to settle the cost of future room-nights

bought from Hotetur. Completion is expected to take place shortly.

MyTravel has also entered into arrangements with Teinver for the purchase of

accommodation from Teinver (including Hotetur) on terms which are commercially

attractive to MyTravel.

As at 31 October 2004, MyTravel's share of Hotetur net assets was £22.2m.

MyTravel's share of Hotetur's earnings before interest, tax and goodwill

amortisation for the thirteen-month period to 31 October 2004 was £3.7m. The

book loss on disposal is expected to be £23m.

Tenerife Sol is a joint venture that owns three hotels in the Canary Islands.

MyTravel has agreed to sell its 50% shareholding for €28.75m (£19.2m), payable

in cash on completion. Completion is expected in August 2005. At completion,

MyTravel will pay Tenerife Sol €7.8m (£5.3m) in repayment of an existing

shareholder loan.

As at 31 October 2004, MyTravel's share of Tenerife Sol net assets was £18.8m.

MyTravel's share of Tenerife Sol's earnings before interest, tax and goodwill

amortisation for the thirteen-month period to 31 October 2004 was £1.9m. The

book loss on disposal is expected to be £1m.

These transactions are consistent with the Group's strategic objectives and will

release both capital and management resource. The proceeds of the disposals

will be used for general corporate purposes.

Current Trading

The summer season 2005 trading to date is encouraging for all divisions.

In the UK, we have reduced our Summer capacity and have 36% fewer holidays left

to sell than we had at the same time last year. The expected increase in the

proportion of brochure bookings is coming through and favourably impacting gross

margin.

In Northern Europe, Summer 2005 capacity has been increased by 3% and bookings

have increased by 7%, with improved gross margins.

In North America, Summer 2005 capacity has been increased by 5%. Bookings have

increased by 2% but margins during this low season period are under competitive

pressure.

Outlook

We continue to make progress against the business plan with clear performance

improvement in the UK, good performance in North America and excellent

performance in Northern Europe.

Trading improvements in Summer 2005 are likely to be offset by fuel price

increases estimated to be £30m (using 17 June 2005 prices). Despite this, the

Board believes that the full year's results will be in line with its

expectations.

We continue to target an operating profit for all three divisions in 2006 and an

industry standard 3.5% margin in the UK in 2007.

FINANCIAL REVIEW

Group Winter Results

% change W04/05 vs W03/04

Capacity+ (16%)

Brochure sales mix++ 7%

Average selling price+ 8%

W04/05 W03/04

Load factor+ 97.5% 96.7%

Operating margin %+++ (7.8%) (10.1%)

Adjusted operating margin %++++ (6.7%) (9.7%)

+ Based on risk businesses only and excludes disposed / exited businesses.

++ Calculated as brochure sales divided by brochure plus lates sales.

+++ Based on Group reported figures excluding income from joint ventures and

associates. Operating profit is stated before exceptional items and goodwill.

++++ As above, but adjusted for disposed / exited businesses and management

calculation of impact of fuel and foreign exchange.

Turnover, including our share from joint ventures, in the 6 months to April 2005

was £1,122.8m (6 months to March 2004: £1,328.5m). In the 6 months to April

2004, turnover was £1,263.9m. The decrease year on year of £141.1m is almost

all attributable to the UK and the reduced capacity on sale in our Risk

businesses.

The operating loss before exceptional items and goodwill was £87.8m (6 months to

March 2004: loss of £149.6m). The operating loss before exceptional items and

goodwill in the 6 months to April 2004 was £126.5m. The £38.7m decrease in

losses reflects an improved performance in the winter in all our major

geographic and business segments. The largest improvement was seen in the UK

Risk businesses where a better balance of supply and demand ensured that a

higher proportion of holidays were sold at brochure prices, leaving fewer

holidays to sell in the discounted lates market.

The strong operating performances in all of our geographic segments were

partially offset by adverse movements year on year in fuel prices. Management

calculates that the adverse impact of the increase in average fuel prices on the

winter 2004/05 operating profit was £17.5m. This has been partially offset by a

favourable impact from foreign exchange movements, principally US dollar to

sterling and sterling to euro, which management calculates at £5.7m.

Exceptional operating costs in the 6 months to April 2005 were £2.7m (6 months

to March 2004: £6.9m), and reflect further costs of the operational

restructuring of certain businesses in the UK.

Exceptional finance charges were £12.4m in the period and represent the costs

incurred on the restructuring since 31 October 2004 and charged to the profit

and loss account. Total costs incurred in the period for the restructuring were

£20.5m, of which £8.1m was charged directly to the share premium account. This

brings the total cost of the restructuring to £41m.

Other exceptional items resulted in a net cost of £2.7m (6 months to March 2004:

£4.6m). Included in other exceptional items is £5.1m loss as a result of

exiting the loss-making Dutch businesses. This was completed on 17 January

2005.

Goodwill amortisation amounted to £5.6m (6 months to March 2004: £7.0m).

Net interest payable before exceptional items was £2.9m (6 months to March 2004:

£31.5m). The substantial reduction year on year reflects the restructuring.

Hedging

The Group now has 94% of its summer 2005 foreign exchange requirements hedged.

Fuel for the summer has been capped at no more than $600 per metric tonne.

Based upon the price as at 17 June 2005, management calculates that the year on

year increase in fuel costs will impact the summer 2005 operating profit by

£30m. Given the cap in place, the impact will not exceed £31m.

For the winter season 2005/06, the Group has 67% of its foreign currency risk

covered. It has partially hedged its fuel requirement with a package of forward

purchases and put options which fixes fuel costs for 37.5% of its requirement

and up to a further 21% if the put options are exercised. The Group therefore

remains exposed to a significant extent to changes in the price of fuel during

the winter season 2005/06. However, our strengthened financial condition will

allow us to institute a more normal seasonal hedging programme over the next

several months.

Taxation

The charge in the period of £6.3m (6 months to March 2004: charge of £1.9m)

relates to taxation of profit in certain overseas businesses, which cannot be

relieved against losses. It is unlikely that there will be a UK tax liability

for the full year. UK tax losses carried forward at 31 October 2004 amounted to

£529m.

Dividend

No interim dividend will be paid (2004: nil).

Balance Sheet

Net liabilities at 30 April 2005 were £250.0m compared with net liabilities of

£877.9m at 31 March 2004 and £879.0m as at 31 October 2004. The movement in the

6 months to 30 April 2005 largely reflects the balance sheet restructuring

referred to above, offset by the losses incurred in the period.

Cash Flow and Net Funds

Cash and deposits at 30 April 2005 were £221.3m, compared with £242.1m at 31

March 2004 and £305.2m at 31 October 2004.

The cash outflow from operating activities was £6.6m in the 6 months to April

2005 compared with £114.4m in the 6 months to March 2004, an improvement of

£107.8m. The reduced outflow year on year reflects the improved operating

performance of the Group together with seasonal working capital movements as a

result of the change in reporting period.

Net interest paid in the period has reduced significantly as a result of the

balance sheet restructuring. However, this has been partly offset by the costs

of restructuring which have been charged to exceptional finance charges.

Net funds at 30 April 2005 were £97.0m compared with net debt of £621.7m at 31

March 2004 and net debt of £577.2m at 31 October 2004. The movement in the 6

months to April 2005 reflects the balance sheet restructuring which was

completed on 31 December 2004.

IFRS

As indicated in the last Annual Report and in accordance with a European

Regulation, MyTravel Group plc intends to adopt International Financial

Reporting Standards (IFRS) in its financial year ending 31 October 2006. This

will require certain changes to the Group's accounting policies, which are

currently drafted to comply with UK Generally Accepted Accounting Principles (UK

GAAP). Work is continuing to quantify the financial impact of the required

changes to accounting policies and to implement the necessary system changes. A

central team reporting to the Group Finance Director is coordinating this work

and progress is reviewed regularly by the Audit Committee.

A summary of the significant changes in accounting policy required by the

adoption of IFRS, which have been identified to date, is set out in Appendix 2.

An update on the progress of the IFRS implementation project will be provided

with the announcement of the preliminary results for the year ending 31 October

2005.

Segmental Review of Operating Results

% change W04/05 vs W03/04

Capacity+ (33%)

Brochure sales mix++ 20%

Average selling price+ 16%

W04/05 W03/04

Load factor+ 98.0% 95.6%

Mix of passengers - short haul 30% 35%

Mix of passengers - medium haul 54% 52%

Mix of passengers - long haul 16% 13%

Internet distribution % 9% 6%

Controlled distribution % 56% 53%

Operating margin %+++ (24.5%) (23.0%)

Adjusted operating margin %++++ (23.4%) (23.0%)

Turnover in the UK was £506.3m (6 months to March 2004: £680.9m). In the 6

months to April 2004 turnover was £646.9m.

Most of the reduction from April 2004 of £140.6m occurred within the Risk

businesses. A 33% reduction in capacity on sale ensured that a higher

proportion of holidays were sold at brochure prices, leaving fewer to sell in

the heavily discounted lates market. As a result, average selling prices

achieved were substantially higher than in the previous winter season.

By reducing capacity and improving our product offering, we improved gross

margins year on year. In addition, we continued our focus on cost savings and

efficiency improvements in all businesses and Selling and marketing, General and

Administration (S,G&A) costs in the UK reduced by £15.4m. These measures

resulted in a reduction in winter operating losses before exceptional items and

goodwill of £24.6m. The operating loss before exceptional items and goodwill

for the 6 months to April 2005 was £123.9m compared with a loss of £148.5m in

the comparable prior year period (6 months to March 2004: loss of £164.7m).

The £24.6m reduction in operating loss before exceptional items and goodwill was

achieved despite rising fuel prices, which management calculates impacted the

results by £7.7m, and a £1.7m adverse impact from the Indian Ocean tsunami.

These were partly offset by favourable foreign currency movements which

management calculates at £2.4m.

The level of control over the distribution of our product in the UK gives us a

strong foundation in the market. The move from 6% to 9% of bookings taken in

the winter period over the internet is encouraging and in recent weeks, this

proportion has increased further to 15%.

Northern Europe

% change W04/05 vs W03/04

Capacity+ 4%

Brochure sales mix++ (7%)

Average selling price+ (6%)

W04/05 W03/04

Load factor + 98.4% 99.2%

Internet distribution % 27% 21%

Controlled distribution % 76% 73%

Operating margin %+++ 4.0% 1.3%

Adjusted operating margin %++++ 6.1% 2.6%

Turnover in Northern Europe was £358.1m, of which the recently exited Dutch

business accounted for £6.3m (6 months to March 2004: £387.3m, of which the

Dutch business accounted for £22.2m). In the 6 months to April 2004, turnover

was £363.7m, of which the Dutch business accounted for £19.1m.

Operating profit before exceptional items and goodwill increased to £14.2m (6

months to March 2004: £5.5m). In the 6 months to April 2004 the operating

profit before exceptional items and goodwill was £4.6m.

The £9.6m improvement year on year includes the impact of reduced losses in our

Dutch operations. These reported an operating loss before exceptional items

and goodwill of £1.1m in the 6 months to April 2005, compared with a loss of

£4.2m in the comparable prior year period (6 months to March 2004: loss of

£4.2m).

The improvement attributable to the continuing Northern European business was

therefore £6.5m and represents an increase in the winter operating profit margin

before exceptional items and goodwill from 2.6% to 6.1% (after adjusting for

exited businesses and management's calculation of the impact of fuel and FX

price movements).

The Indian Ocean tsunami in December 2004 adversely impacted the results by

£10.0m in repatriation costs, lost margin and refunds. Management calculates

that the Northern Europe business was also adversely impacted by higher fuel

costs of £6.4m.

These were offset by maintaining a good balance between supply and demand (4%

increase in capacity) and further efficiency improvements in the airline. We

also continued to focus on driving overhead costs out of the business and S,G&A

costs in Northern Europe were reduced by £5.5m in the period. In addition, the

results benefited from £5.6m of one-off items in the period, which better

aligned the accounting practices within our Northern European business to those

of other parts of the Group, and better currency rates of £0.2m.

North America

% change W04/05 vs W03/04

Capacity+ 5%

Brochure sales mix++ -

Average selling price+ 3%

W04/05 W03/04

Load factor + 95.0% 96.1%

Internet distribution % 5% 2%

Controlled distribution % 15% 14%

Operating margin %+++ 9.4% 7.4%

Adjusted operating margin %++++ 9.5% 8.9%

Turnover in our North American business was £245.5m (6 months to March 2004:

£246.4m, of which the businesses disposed of in the first quarter of the prior

year accounted for £18.5m). In the 6 months to April 2004, turnover was

£239.8m, of which the disposed businesses accounted for £4.0m.

Operating profit before exceptional items and goodwill was £23.1m (6 months to

March 2004: £9.5m, of which the disposed businesses accounted for a loss of

£5.2m). Operating profit before exceptional items and goodwill in the 6 months

to April 2004 was £17.7m, of which the disposed businesses contributed a loss of

£3.4m. The improvement attributable to our ongoing operations year on year was

therefore £2.0m.

This reflects an improvement in our Alumni Holidays business, for which the

market improved from the difficult trading environment of the prior year, and

the Canadian Risk operators, which yielded strong margins.

Management calculates that the North American business suffered from higher fuel

costs of £3.4m largely offset by favourable foreign currency movements of £3.1m.

Joint Ventures and Associates

Our share of interests from joint ventures and associates was a loss before

exceptional items and goodwill of £1.2m (6 months to March 2004: profit of

£0.1m). In the 6 months to April 2004, our share was a loss of £0.3m. The

deterioration year on year relates to Hotetur, our Spanish hotel group joint

venture, which suffered poor occupancy in a number of hotels throughout the

winter season.

The Group announced today plans to dispose of Hotetur and Tenerife Sol.

Following these disposals, our interests will be limited to our 19.99% share in

Aqua Sol, a listed Cypriot hotel group operating in the Eastern Mediterranean.

Our share of the results of Aqua Sol in the period, before exceptional items and

goodwill, was a loss of £0.8m (6 months to March 2004: loss of £0.7m). In the 6

months to April 2004, our share was a loss of £0.8m. In the 13 months to

October 2004, Aqua Sol contributed £1.6m profit to the Group's operating result

out of the £7.2m reported as income from joint ventures and associates.

Group Profit and Loss Account

Unaudited Unaudited Audited

6 months to 6 months to 13 months to

30/04/05 31/03/04 31/10/04

Notes £m £m £m

Turnover: Group and share of joint ventures' 2(a)

Continuing operations 1,122.8 1,328.5 3,498.7

Less: share of joint ventures' turnover

Continuing operations (12.9) (13.9) (35.9)

Group turnover 1,109.9 1,314.6 3,462.8

Operating loss before exceptional

operating items and goodwill amortisation 2(b)

Continuing operations (86.6) (149.7) (24.7)

Exceptional operating items 2(c) (2.7) (6.9) (62.3)

Goodwill amortisation 2(d) (5.3) (6.6) (12.8)

Operating loss (94.6) (163.2) (99.8)

Income from interests in joint ventures and

associates before exceptional operating items

and goodwill amortisation 2(b) (1.2) 0.1 7.2

Exceptional operating items 2(c) - - (5.1)

Goodwill amortisation 2(d) (0.3) (0.4) (0.7)

Income from interests in joint ventures and

associates (1.5) (0.3) 1.4

Group and share of joint ventures' and

associates' operating loss 2(b) (96.1) (163.5) (98.4)

Exceptional items

(Loss)/profit on sale of subsidiary undertakings 2(e) (5.1) 11.6 10.9

Profit/(loss) on sale of tangible fixed assets 2(f) 1.3 0.3 (3.4)

Profit on sale of joint venture undertaking - 0.1 0.1

Profit/(loss) on termination of operations 2(g)

- continuing operations 1.1 0.1 (18.5)

- discontinued operations - (0.3) (0.5)

Provision for loss on sale or termination - (16.4) -

Loss on ordinary activities before finance charges (98.8) (168.1) (109.8)

Finance charges (net) 2(h)

Group (2.1) (30.6) (62.5)

Exceptional finance charges (12.4) - (15.6)

Joint ventures and associates (0.8) (0.9) (2.4)

Loss on ordinary activities before tax 2(i) (114.1) (199.6) (190.3)

Tax on loss on ordinary activities 3 (6.3) (1.9) (13.0)

Loss on ordinary activities after tax (120.4) (201.5) (203.3)

Equity minority interests 0.2 (0.2) (0.3)

Loss for the period - transfer from reserves (120.2) (201.7) (203.6)

Loss per share - basic and diluted 5 (1.36p) (37.86p) (37.88p)

- pre-goodwill amortisation (1.30p) (36.54p) (35.37p)

- pre-goodwill amortisation and exceptional (1.09p) (34.39p) (17.75p)

items

Group Balance Sheet

Unaudited Unaudited Audited

as at as at as at

30/04/05 31/03/04 31/10/04

Notes £m £m £m

Fixed assets

Intangible assets - goodwill 136.6 148.2 146.2

Tangible assets 287.5 337.7 302.8

Joint venture undertakings

Share of gross assets 87.4 86.6 89.6

Share of gross liabilities (58.2) (61.1) (59.6)

Goodwill 10.7 11.4 11.0

39.9 36.9 41.0

Investments in associated undertakings 8.4 11.5 10.0

Other investments 0.1 0.1 0.1

Total fixed assets 472.5 534.4 500.1

Current assets

Stocks 7.8 10.5 6.7

Debtors: amounts falling due within one year 298.5 359.6 281.6

Debtors: amounts falling due after one year 118.6 103.2 104.6

Cash and deposits 221.3 242.1 305.2

646.2 715.4 698.1

Creditors: amounts falling due within one year (1,113.8) (1,155.9) (1,056.6)

Net current liabilities (467.6) (440.5) (358.5)

Total assets less current liabilities 4.9 93.9 141.6

Creditors: amounts falling due after one year

Convertible debt - (216.4) (216.4)

Other creditors (143.4) (662.3) (677.8)

(143.4) (878.7) (894.2)

Provisions for liabilities and charges (111.5) (93.1) (126.4)

Net liabilities (250.0) (877.9) (879.0)

Capital and reserves

Called up share capital 134.8 54.4 54.4

Shares to be issued 8 26.7 - -

Reserves (412.5) (933.6) (934.8)

Equity shareholders' deficit (251.0) (879.2) (880.4)

Equity minority interests 1.0 1.3 1.4

(250.0) (877.9) (879.0)

Group Statement of Total Recognised Gains and Losses

Unaudited Unaudited Audited

6 months to 6 months to 13 months to

30/04/05 31/03/04 31/10/04

£m £m £m

Loss for the period (120.2) (201.7) (203.6)

Currency differences on foreign currency net investments (0.2) (8.4) (9.6)

Total recognised gains and losses relating to the period (120.4) (210.1) (213.2)

Reconciliation of Movements in Group Shareholders' Deficit

Unaudited Unaudited Audited

6 months to 6 months to 13 months to

30/04/05 31/03/04 31/10/04

£m £m £m

Loss for the period (120.2) (201.7) (203.6)

Exchange differences (0.2) (8.4) (9.6)

Issue of shares (net of expenses) 749.8 5.2 5.2

Goodwill written back to reserves - - 1.9

Net decrease/(increase) in shareholders' deficit 629.4 (204.9) (206.1)

Equity shareholders' deficit at start of period (880.4) (674.3) (674.3)

Equity shareholders' deficit at period end (251.0) (879.2) (880.4)

Group Cash Flow Statement

Unaudited Unaudited Audited

6 months to 6 months to 13 months to

30/04/05 31/03/04 31/10/04

£m £m £m

Net cash (outflow)/inflow from operating activities (6.6) (114.4) 26.5

Returns on investments and servicing of finance

Interest received 4.5 16.5 24.3

Interest paid (18.6) (37.1) (86.2)

Interest element of finance leases (2.5) (3.8) (7.4)

Minority interests (0.1) (0.2) (0.3)

Net cash outflow from returns on investments

and servicing of finance (16.7) (24.6) (69.6)

Tax paid (14.6) (8.2) (16.2)

Capital expenditure and financial investment

Purchase of tangible fixed assets (20.5) (7.7) (29.1)

Sale of tangible fixed assets 12.2 3.5 8.0

Net cash outflow from capital expenditure

and financial investment (8.3) (4.2) (21.1)

Acquisitions and disposals

Purchase of subsidiary undertakings - (5.9) (7.0)

Cash at bank and in hand acquired with subsidiaries - 13.3 15.2

Proceeds less cash at bank and in hand relating to

disposal of subsidiaries (7.6) 117.4 123.1

Net cash (outflow)/inflow from acquisitions

and disposals (7.6) 124.8 131.3

Cash (outflow)/inflow before management of liquid

resources and financing (53.8) (26.6) 50.9

Management of liquid resources

Movement on term deposits 10.1 (45.0) 11.8

Net cash inflow/(outflow) from management of

liquid resources 10.1 (45.0) 11.8

Financing

Expenses of issue of share capital (8.1) - -

Loan facilities (repaid)/utilised (14.5) 17.9 14.4

Capital element of finance lease rental payments (16.3) (16.0) (26.3)

Net cash (outflow)/inflow from financing (38.9) 1.9 (11.9)

(Decrease)/increase in cash in the period (82.6) (69.7) 50.8

Reconciliation of Net Cash Flow to Movement in Net Funds/(Debt)

Unaudited Unaudited Audited

6 months to 6 months to 13 months to

30/04/05 31/03/04 31/10/04

£m £m £m

(Decrease)/increase in cash in the period (82.6) (69.7) 50.8

Cash outflow/(inflow) from decrease/(increase) in debt

and lease financing 30.8 (1.9) 11.9

Cash (inflow)/outflow from increase/(decrease)

in liquid resources (10.1) 45.0 (11.8)

Changes in net funds/(debt) resulting from cash flows (61.9) (26.6) 50.9

Loans acquired with subsidiary undertakings - (27.1) (27.1)

Finance leases disposed of with subsidiary undertakings - 0.1 0.1

Debt capitalised as part of restructuring 727.5 - -

Conversion of Convertible Bonds due 2007 - 5.2 5.2

Capitalisation of finance leases (7.6) - (30.4)

Exchange differences 16.2 34.0 31.4

Movement in net funds/(debt) in the period 674.2 (14.4) 30.1

Net debt brought forward (577.2) (607.3) (607.3)

Net funds/(debt) carried forward 97.0 (621.7) (577.2)

Notes to the Financial Information

1. Basis of preparation

The interim financial information has been prepared on the basis of accounting

policies consistent with those set out in the Group's 2004 Annual Report.

The financial information in this statement relating to the six months ended 30

April 2005 and the six months ended 31 March 2004 is unaudited and does not

constitute full statutory accounts within the meaning of Section 240 of the

Companies Act 1985. The results shown for the 13 months ended 31 October 2004

have been derived from the full report and accounts which received an

unqualified auditors' report and did not contain any statements under Section

237(2) or (3) of the Companies Act 1985, and have been delivered to the

Registrar of Companies.

2. Segmental information

(a) Turnover Unaudited Unaudited Audited

6 months to 6 months to 13 months to

Geographical analysis 30/04/05 31/03/04 31/10/04

£m £m £m

UK 506.3 680.9 2,194.9

Northern Europe 358.1 387.3 863.9

North America 245.5 246.4 404.0

Group 1,109.9 1,314.6 3,462.8

Joint ventures 12.9 13.9 35.9

Group and share of joint ventures 1,122.8 1,328.5 3,498.7

Unaudited Unaudited Audited

6 months to 6 months to 13 months to

Business segment analysis 30/04/05 31/03/04 31/10/04

£m £m £m

Risk Mass Market 667.1 825.3 2,252.1

Focused 264.4 275.3 734.2

Total Risk 931.5 1,100.6 2,986.3

Non-Risk 178.4 214.0 476.5

Group 1,109.9 1,314.6 3,462.8

Joint ventures 12.9 13.9 35.9

Group and share of joint ventures 1,122.8 1,328.5 3,498.7

In addition to the geographic analysis of turnover and operating loss, business

segment information has been provided which further analyses previously

published information to reflect the nature of the business.

(b) Operating loss Pre Post

exceptional operating exceptional operating

items & goodwill items & goodwill

Unaudited Unaudited Audited Unaudited Unaudited Audited

6 months to 6 months to 13 months to 6 months to 6 months to 13 months to

Geographical analysis 30/04/05 31/03/04 31/10/04 30/04/05 31/03/04 31/10/04

£m £m £m £m £m £m

UK (123.9) (164.7) (85.3) (129.2) (174.2) (153.1)

Northern Europe 14.2 5.5 48.5 13.9 5.3 47.8

North America 23.1 9.5 12.1 20.7 5.7 5.5

Group (86.6) (149.7) (24.7) (94.6) (163.2) (99.8)

Joint ventures (0.4) 0.8 5.6 (0.7) 0.4 4.0

Associates (0.8) (0.7) 1.6 (0.8) (0.7) (2.6)

Group and share of joint

ventures and associates (87.8) (149.6) (17.5) (96.1) (163.5) (98.4)

Pre Post

exceptional operating exceptional operating

items & goodwill items & goodwill

Unaudited Unaudited Audited Unaudited Unaudited Audited

6 months to 6 months to 13 months to 6 months to 6 months to 13 months to

Business segment analysis 30/04/05 31/03/04 31/10/04 30/04/05 31/03/04 31/10/04

£m £m £m £m £m £m

Risk

Mass Market (95.9) (126.2) (6.1) (99.9) (128.3) (59.9)

Focused 11.9 (9.4) (19.5) 11.7 (9.6) (20.3)

Total Risk (84.0) (135.6) (25.6) (88.2) (137.9) (80.2)

Non-Risk 2.8 (6.1) 8.3 (1.0) (10.0) (4.3)

Central costs (5.4) (8.0) (7.4) (5.4) (15.3) (15.3)

Group (86.6) (149.7) (24.7) (94.6) (163.2) (99.8)

Joint ventures (0.4) 0.8 5.6 (0.7) 0.4 4.0

Associates (0.8) (0.7) 1.6 (0.8) (0.7) (2.6)

Group and share of joint

ventures and associates (87.8) (149.6) (17.5) (96.1) (163.5) (98.4)

6 months to 6 months to 13 months to

30/04/05 31/03/04 31/10/04

£m £m £m

UK operational restructuring (i) (1.1) - (53.2)

restructuring of aircraft leases (ii) (1.6) (0.9) (1.7)

balance sheet restructuring (iii) - - (4.8)

other advisory fees (iv) - (7.5) (4.2)

balance sheet review (v) - 1.5 1.8

Northern Europe balance sheet review (v) - - (0.2)

Group (2.7) (6.9) (62.3)

Joint ventures operational restructuring (i) - - (0.9)

Associates balance sheet review (v) - - (4.2)

Group and share of joint ventures and associates (2.7) (6.9) (67.4)

(i) Operational restructuring represents redundancy and other costs incurred

in reorganising the Group's UK businesses.

(ii) This represents the net cost of the restructuring of certain aircraft

leases.

(iii) Balance sheet restructuring represents the costs incurred in 2004 in

respect of preparatory work relating to the refinancing and restructuring

of the Group.

(iv) Other advisory fees represent costs incurred in respect of the 2003

refinancing of the Group.

(v) The balance sheet review credits/(charges) in 2004 represent the net of

adjustments to the carrying value of goodwill and certain other assets,

together with the release of some provisions made in the previous year on

the basis of improved information.

(d) Goodwill amortisation Unaudited Unaudited Audited

6 months to 6 months to 13 months to

30/04/05 31/03/04 31/10/04

£m £m £m

UK (2.6) (2.6) (5.7)

Northern Europe (0.3) (0.2) (0.5)

North America (2.4) (3.8) (6.6)

Group (5.3) (6.6) (12.8)

Joint ventures (0.3) (0.4) (0.7)

Group and share of joint ventures and associates (5.6) (7.0) (13.5)

(e) (Loss)/profit on sale of subsidiary undertakings Unaudited Unaudited Audited

6 months to 6 months to 13 months to

30/04/05 31/03/04 31/10/04

£m £m £m

UK - 0.9 0.8

Northern Europe (5.1) (0.5) (0.3)

North America - 11.2 10.4

Group (5.1) 11.6 10.9

(f) Profit/(loss) on sale of tangible fixed assets Unaudited Unaudited Audited

6 months to 6 months to 13 months to

30/04/05 31/03/04 31/10/04

£m £m £m

UK 1.3 (0.3) (3.9)

Northern Europe - 0.6 0.5

Group 1.3 0.3 (3.4)

(g) Profit/(loss) on termination of operations Unaudited Unaudited Audited

6 months to 6 months to 13 months to

30/04/05 31/03/04 31/10/04

£m £m £m

UK continuing 1.1 0.1 (18.5)

Other Europe discontinued - (0.3) (0.5)

Group 1.1 (0.2) (19.0)

(h) Finance charges (net) Unaudited Unaudited Audited

6 months to 6 months to 13 months to

30/04/05 31/03/04 31/10/04

£m £m £m

UK (2.8) (30.1) (62.0)

Northern Europe 2.4 2.0 4.0

North America (1.7) (2.5) (4.5)

Group (2.1) (30.6) (62.5)

Exceptional finance charges (12.4) - (15.6)

Joint ventures (0.6) (0.5) (1.7)

Associates (0.2) (0.4) (0.7)

Group and share of joint ventures and associates (15.3) (31.5) (80.5)

The exceptional finance charges relate to costs incurred in the refinancing and

restructuring of the Group.

(i) Loss on ordinary activities before tax

Pre Post

exceptional items exceptional items

& goodwill & goodwill

Unaudited Unaudited Audited Unaudited Unaudited Audited

6 months to 6 months to 13 months to 6 months to 6 months to 13 months to

30/04/05 31/03/04 31/10/04 30/04/05 31/03/04 31/10/04

£m £m £m £m £m £m

UK (126.7) (194.8) (147.3) (142.0) (220.0) (252.3)

Northern Europe 16.6 7.5 52.5 11.2 7.4 52.0

North America 21.4 7.0 7.6 19.0 14.4 11.4

Group continuing (88.7) (180.3) (87.2) (111.8) (198.2) (188.9)

Discontinued

Other Europe - - - - (0.3) (0.5)

Group (88.7) (180.3) (87.2) (111.8) (198.5) (189.4)

Joint ventures (1.0) 0.3 3.9 (1.3) - 2.4

Associates (1.0) (1.1) 0.9 (1.0) (1.1) (3.3)

Group and share of joint

ventures and associates (90.7) (181.1) (82.4) (114.1) (199.6) (190.3)

3. Tax on loss on ordinary activities

The charge in the period of £6.3m (six months to March 2004: charge of £1.9m)

relates to taxation in certain overseas businesses, which cannot be relieved

against losses. It is unlikely that there will be a UK tax liability for the

full year.

4. Dividends

No interim dividend will be paid (six months to March 2004: nil).

5. Loss per share

Basic loss per share is calculated by dividing the loss attributable to ordinary

shareholders by the weighted average number of ordinary shares in issue during

the period, excluding those held in the employee share ownership trusts. Due to

losses made, there is no difference between basic and diluted loss per share.

Supplementary loss per share figures are presented. These exclude the effects of

the amortisation of goodwill and also the effects of the exceptional items and

are presented to allow comparison to the prior year on a like-for-like basis.

Further details of the goodwill amortisation and exceptional items can be found

in notes 2(c) to 2(h).

Unaudited Unaudited Unaudited Unaudited Audited Audited

6 months to 6 months to 6 months to 6 months to 13 months to 13 months to

30/04/05 30/04/05 31/03/04 31/03/04 31/10/04 31/10/04

Weighted average number

of shares (millions) 8,850.5 532.6 537.5

Earnings Per share Earnings Per share Earnings Per share

amount amount amount

£m p £m p £m p

Basic loss per share (120.2) (1.36) (201.7) (37.86) (203.6) (37.88)

Effect of goodwill

amortisation 5.6 0.06 7.0 1.32 13.5 2.51

Basic loss per share pre-

goodwill amortisation (114.6) (1.30) (194.7) (36.54) (190.1) (35.37)

Exceptional items

Exceptional operating

items 2.7 0.03 6.9 1.29 67.4 12.54

Exceptional finance

charges 12.4 0.14 - - 15.6 2.90

Loss/(profit) on sale of

subsidiary undertakings 5.1 0.06 (11.6) (2.18) (10.9) (2.03)

(Profit)/loss on sale of

tangible fixed assets (1.3) (0.01) (0.3) (0.06) 3.4 0.63

Profit on sale of joint

venture undertakings - - (0.1) (0.02) (0.1) (0.02)

(Profit)/loss on

termination of operations (1.1) (0.01) 0.2 0.04 19.0 3.54

Provision for loss on

sale or termination - - 16.4 3.08 - -

Tax relating to the

exceptional items - - - - 0.3 0.06

Basic loss per share pre-

goodwill amortisation

and exceptional items (96.8) (1.09) (183.2) (34.39) (95.4) (17.75)

6. Reconciliation of operating loss to operating cash flows

Unaudited Unaudited Audited

6 months to 6 months to 13 months to

30/04/05 31/03/04 31/10/04

£m £m £m

Operating loss (94.6) (163.2) (99.8)

Depreciation charges 29.3 35.8 77.4

Goodwill amortisation 5.3 6.6 12.8

Other non-cash items 1.5 - -

Impairment of goodwill - 0.2 2.4

Impairment of fixed assets - - 30.3

Movements in working capital and provisions 45.0 6.2 8.5

Cash impact of the termination of operations 6.9 - (5.1)

Net cash (outflow)/inflow from operating activities (6.6) (114.4) 26.5

7. Analysis of net funds/(debt)

Cash Other

At inflow/ Effect of non-cash Exchange At

01/11/04 (outflow) restructuring changes movements 30/04/05

£m £m £m £m £m £m

Cash at bank and in

hand 237.6 (82.6) - - 8.8 163.8

Term deposits 67.6 (10.1) - - - 57.5

Cash and deposits 305.2 (92.7) - - 8.8 221.3

Debt due within 1 year (6.7) 6.5 - (6.0) 0.4 (5.8)

Debt due after 1 year (745.0) 8.0 727.5 6.5 3.0 -

Finance leases (130.7) 16.3 - (8.1) 4.0 (118.5)

Net funds/(debt) (577.2) (61.9) 727.5 (7.6) 16.2 97.0

8. Shares to be issued

The amount shown as shares to be issued of £26.7m is in respect of the fair

value of shares to be issued to former convertible bondholders who have not yet

surrendered their bond certificates. Under the terms of the consensual

restructuring, which was completed on 31 December 2004, the bondholders ceased

to have any rights to repayment of principal and interest ceased to accrue on

the bonds after 25 August 2004. The bondholders are required to surrender their

bonds in exchange for new shares of MyTravel Group plc by 30 June 2005. Any

bonds still outstanding at that date will be mandatorily converted into new

shares by the Company.

At 30 April 2005, convertible bonds with a principal amount of £26.7m remained

to be formally converted into new shares. As this amount no longer represents a

liability of the Company, it has been included on the balance sheet as 'Shares

to be issued'.

9. General

A copy of our Interim Report 2005 will be sent to all shareholders and further

copies will be available for members of the public on our website at

www.mytravelgroup.com,

or on application to the Company Secretary, MyTravel

Group plc, Parkway One, Parkway Business Centre, 300 Princess Road, Manchester,

M14 7QU.

Independent review report to MyTravel Group plc

Introduction

We have been instructed by the Company to review the financial information for

the six months ended 30 April 2005 which comprises the profit and loss account,

the balance sheet, the statement of total recognised gains and losses, the

reconciliation of movements in Group shareholders' deficit, the cash flow

statement, the reconciliation of net cash flow to movement in net funds/(debt)

and related notes 1 to 9. We have read the other information contained in the

interim report and considered whether it contains any apparent misstatements or

material inconsistencies with the financial information.

This report is made solely to the Company in accordance with Bulletin 1999/4

issued by the Auditing Practices Board. Our work has been undertaken so that we

might state to the Company those matters we are required to state to them in an

independent review report and for no other purpose. To the fullest extent

permitted by law, we do not accept or assume responsibility to anyone other than

the Company, for our review work, for this report, or for the conclusions we

have formed.

Directors' responsibilities

The interim report, including the financial information contained therein, is

the responsibility of, and has been approved by, the Directors. The Directors

are responsible for preparing the interim report in accordance with the Listing

Rules of the Financial Services Authority which require that the accounting

policies and presentation applied to the interim figures are consistent with

those applied in preparing the preceding annual accounts except where any

changes, and the reasons for them, are disclosed.

Review work performed

We conducted our review in accordance with the guidance contained in Bulletin

1999/4 issued by the Auditing Practices Board for use in the United Kingdom. A

review consists principally of making enquiries of Group management and applying

analytical procedures to the financial information and underlying financial data

and, based thereon, assessing whether the accounting policies and presentation

have been consistently applied unless otherwise disclosed. A review excludes

audit procedures such as tests of controls and verification of assets,

liabilities and transactions. It is substantially less in scope than an audit

performed in accordance with United Kingdom auditing standards and therefore

provides a lower level of assurance than an audit. Accordingly, we do not

express an audit opinion on the financial information.

Review conclusion

On the basis of our review we are not aware of any material modifications that

should be made to the financial information as presented for the six months

ended 30 April 2005.

Deloitte & Touche LLP

Chartered Accountants

Manchester

23 June 2005

APPENDIX 1 - PRO FORMA FINANCIAL INFORMATION

Group Profit and Loss Account

Unaudited Unaudited

6 months to 6 months to

30/04/05 30/04/04

Notes £m £m

Turnover: Group and share of joint ventures' 2(a)

Continuing operations 1,122.8 1,263.9

Less: share of joint ventures' turnover

Continuing operations (12.9) (13.5)

Group turnover 1,109.9 1,250.4

Operating loss before exceptional

operating items and goodwill amortisation 2(b)

Continuing operations (86.6) (126.2)

Exceptional operating items 2(c) (2.7) (9.0)

Goodwill amortisation 2(d) (5.3) (6.1)

Operating loss (94.6) (141.3)

Income from interests in joint ventures and

associates before exceptional operating items

and goodwill amortisation 2(b) (1.2) (0.3)

Goodwill amortisation 2(d) (0.3) (0.3)

Income from interests in joint ventures and

associates (1.5) (0.6)

Group and share of joint ventures' and

associates' operating loss 2(b) (96.1) (141.9)

Exceptional items

(Loss)/profit on sale of subsidiary undertakings 2(e) (5.1) 11.5

Profit on sale of tangible fixed assets 2(f) 1.3 0.4

Profit on sale of joint venture undertaking - 0.1

Profit/(loss) on termination of operations 2(g)

- continuing operations 1.1 0.2

- discontinued operations - (0.3)

Provision for loss on sale or termination - (16.4)

Loss on ordinary activities before finance charges (98.8) (146.4)

Finance charges (net) 2(h)

Group (2.1) (30.6)

Exceptional finance charges (12.4) -

Joint ventures and associates (0.8) (0.9)

Loss on ordinary activities before tax 2(i) (114.1) (177.9)

Tax on loss on ordinary activities 3 (6.3) (1.7)

Loss on ordinary activities after tax (120.4) (179.6)

Equity minority interests 0.2 (0.2)

Loss for the period - transfer from reserves (120.2) (179.8)

Notes to the Pro Forma Financial Information

1. Basis of preparation

The interim financial information has been prepared on the basis of accounting

policies consistent with those set out in the Group's 2004 Annual Report.

The financial information in this statement relating to the six months ended 30

April 2005 and the six months ended 30 April 2004 is unaudited and does not

constitute full statutory accounts within the meaning of Section 240 of the

Companies Act 1985.

2. Segmental information

(a) Turnover Unaudited Unaudited

6 months to 6 months to

Geographical analysis 30/04/05 30/04/04

£m £m

UK 506.3 646.9

Northern Europe 358.1 363.7

North America 245.5 239.8

Group 1,109.9 1,250.4

Joint ventures 12.9 13.5

Group and share of joint ventures 1,122.8 1,263.9

Unaudited Unaudited

6 months to 6 months to

Business segment analysis 30/04/05 30/04/04

£m £m

Risk Mass Market 667.1 782.3

Focused 264.4 267.3

Total Risk 931.5 1,049.6

Non-Risk 178.4 200.8

Group 1,109.9 1,250.4

Joint ventures 12.9 13.5

Group and share of joint ventures 1,122.8 1,263.9

(b) Operating loss Pre Post

exceptional operating exceptional operating

items & goodwill items & goodwill

Unaudited Unaudited Unaudited Unaudited

6 months to 6 months to 6 months to 6 months to

Geographical analysis 30/04/05 30/04/04 30/04/05 30/04/04

£m £m £m £m

UK (123.9) (148.5) (129.2) (160.1)

Northern Europe 14.2 4.6 13.9 4.3

North America 23.1 17.7 20.7 14.5

Group (86.6) (126.2) (94.6) (141.3)

Joint ventures (0.4) 0.5 (0.7) 0.2

Associates (0.8) (0.8) (0.8) (0.8)

Group and share of joint

ventures and associates (87.8) (126.5) (96.1) (141.9)

Pre Post

exceptional operating exceptional operating

items & goodwill items & goodwill

Unaudited Unaudited Unaudited Unaudited

6 months to 6 months to 6 months to 6 months to

Business segment analysis 30/04/05 30/04/04 30/04/05 30/04/04

£m £m £m £m

Risk

Mass Market (95.9) (119.9) (99.9) (122.2)

Focused 11.9 5.2 11.7 5.0

Total Risk (84.0) (114.7) (88.2) (117.2)

Non-Risk 2.8 (4.3) (1.0) (7.6)

Central costs (5.4) (7.2) (5.4) (16.5)

Group (86.6) (126.2) (94.6) (141.3)

Joint ventures (0.4) 0.5 (0.7) 0.2

Associates (0.8) (0.8) (0.8) (0.8)

Group and share of joint

ventures and associates (87.8) (126.5) (96.1) (141.9)

6 months to 6 months to

30/04/05 30/04/04

£m £m

UK operational restructuring (i) (1.1) -

restructuring of aircraft leases (ii) (1.6) (0.9)

other advisory fees (iii) - (9.3)

balance sheet review (iv) - 1.2

Group (2.7) (9.0)

(i) Operational restructuring represents redundancy and other costs incurred

in reorganising the Group's UK businesses.

(ii) This represents the net cost of the restructuring of certain aircraft

leases.

(iii) Other advisory fees represent costs incurred in respect of the 2003

refinancing of the Group.

(iv) The balance sheet review credits/(charges) in 2004 represent the net of

adjustments to the carrying value of goodwill and certain other assets,

together with the release of some provisions made in the previous year on

the basis of improved information.

(d) Goodwill amortisation Unaudited Unaudited

6 months to 6 months to

30/04/05 30/04/04

£m £m

UK (2.6) (2.6)

Northern Europe (0.3) (0.3)

North America (2.4) (3.2)

Group (5.3) (6.1)

Joint ventures (0.3) (0.3)

Group and share of joint ventures and associates (5.6) (6.4)

(e) (Loss)/profit on sale of subsidiary undertakings Unaudited Unaudited

6 months to 6 months to

30/04/05 30/04/04

£m £m

UK - 0.8

Northern Europe (5.1) (0.5)

North America - 11.2

Group (5.1) 11.5

(f) Profit/(loss) on sale of tangible fixed assets Unaudited Unaudited

6 months to 6 months to

30/04/05 30/04/04

£m £m

UK 1.3 (0.3)

Northern Europe - 0.7

Group 1.3 0.4

(g) Profit/(loss) on termination of operations Unaudited Unaudited

6 months to 6 months to

30/04/05 30/04/04

£m £m

UK continuing 1.1 0.2

Other Europe discontinued - (0.3)

Group 1.1 (0.1)

(h) Finance charges (net) Unaudited Unaudited

6 months to 6 months to

30/04/05 30/04/04

£m £m

UK (2.8) (31.2)

Northern Europe 2.4 2.8

North America (1.7) (2.2)

Group (2.1) (30.6)

Exceptional finance charges (12.4) -

Joint ventures (0.6) (0.4)

Associates (0.2) (0.5)

Group and share of joint ventures and associates (15.3) (31.5)

The exceptional finance charges relate to costs incurred in the refinancing and

restructuring of the Group.

(i) Loss on ordinary activities before tax

Pre Post

exceptional items exceptional items

& goodwill & goodwill

Unaudited Unaudited Unaudited Unaudited

6 months to 6 months to 6 months to 6 months to

30/04/05 30/04/04 30/04/05 30/04/04

£m £m £m £m

UK (126.7) (179.7) (142.0) (207.0)

Northern Europe 16.6 7.4 11.2 7.3

North America 21.4 15.5 19.0 23.5

Group continuing (88.7) (156.8) (111.8) (176.2)

Discontinued

Other Europe - - - (0.3)

Group (88.7) (156.8) (111.8) (176.5)

Joint ventures (1.0) 0.1 (1.3) (0.1)

Associates (1.0) (1.3) (1.0) (1.3)

Group and share of joint

ventures and associates (90.7) (158.0) (114.1) (177.9)

3. Tax on loss on ordinary activities

The charge in the period of £6.3m (six months to April 2004: £1.7m) relates to

taxation in certain overseas businesses, which cannot be relieved against

losses. It is unlikely that there will be a UK tax liability for the full year.

APPENDIX 2 - IMPLEMENTATION OF INTERNATIONAL FINANCIAL REPORTING STANDARDS

A summary of the significant changes in accounting policy required by the

adoption of IFRS, which have been identified to date, is set out below but as

the project continues it is possible that further significant changes may be

identified.

IFRS 3 'Business Combinations' prohibits the amortisation of goodwill but

requires an annual test for impairment. The amortisation charge for the period

ended 31 October 2004 was £13.5m.

IFRS 2 'Share-based Payment' requires recognition in the income statement of an

expense in respect of the grant of equity instruments, based on their fair value

at the date of grant.

IAS 39 'Financial Instruments: Recognition and Measurement' requires that the

fair value of any hedge instrument is recorded on the balance sheet with

resulting gains or losses recorded in the income statement or as a separate

component of equity, as appropriate.

IAS 21 'The Effects of Changes in Foreign Exchange Rates' requires translation

of transactions arising in a foreign currency at the exchange rate on the date

of the transaction and translation of foreign currency denominated monetary

assets and liabilities at the period end exchange rate. The Group's current

accounting policy, in accordance with UK GAAP, allows such items to be

translated at the appropriate hedged rate, where hedging instruments have been

used.

IAS 38 'Intangible Assets' requires that expenditure on advertising and

promotion is written off as incurred. The Group's current accounting policy, in

accordance with UK GAAP, is to charge brochure and promotional costs to the

profit and loss account over the season to which they relate, where recovery of

the costs is reasonably assured.

IAS 17 'Leases' requires that a lease that transfers substantially all the risks

and rewards of ownership, is classified as a finance lease by the lessee. This

is consistent with the Group's current accounting policy, however, the examples

and indicators of a finance lease provided in IAS 17 differ from those in the

corresponding UK accounting standard and an exercise is underway to review the

Group's leases and determine if any classification changes are required.

APPENDIX 3 - SEGMENTAL ANALYSIS MATRIX

Turnover

6 months to April 2005

UK NE NA Total

£m £m £m £m

Risk Mass Market 330.2 336.9 - 667.1

Focused 91.5 - 172.9 264.4

Total Risk 421.7 336.9 172.9 931.5

Non-Risk 84.6 21.2 72.6 178.4

Group 506.3 358.1 245.5 1,109.9

Joint ventures 12.9

Group and share of joint ventures 506.3 358.1 245.5 1,122.8

Operating result before exceptional items and goodwill

6 months to April 2005

UK NE NA Total

£m £m £m £m

Risk Mass Market (108.6) 12.7 - (95.9)

Focused (6.4) - 18.3 11.9

Total Risk (115.0) 12.7 18.3 (84.0)

Non-Risk (3.5) 1.5 4.8 2.8

Central costs (5.4) - - (5.4)

Group (123.9) 14.2 23.1 (86.6)

Joint ventures & associates (1.2)

Group and share of joint

ventures & associates (123.9) 14.2 23.1 (87.8)

The following table sets out the key ongoing businesses included in each of the

segments noted above:

UK NE NA

Risk

Mass Market Airtours Holidays Ving

Going Places Always

MyTravel Airways UK Saga

Hotels & Resorts Tjareborg

White Horse Insurance Spies

MyTravel Airways A/S

Sunwing Hotels

Focused Direct Holidays Sunquest Holidays

Panorama Holidays

Non-Risk Cresta Holidays Globetrotter The Holiday Network

Bridge Travel Service Gate Eleven Canadian retail

Tradewinds Ving Flex operations

Business Travel Alumni Holidays

Management DFW

LVI

ABC