Kuoni Group is to make an “extensive” restructure of its loss-making Global Travel Services division following the sale of its tour operating interests.
Kuoni also confirmed a partnership with multi-billion dollar Chinese tourism and aviation business HNA Group.
The two companies are to jointly develop the outbound travel business in China and to partner in “related strategic matters”.
They are looking at various areas of potential co-operation “to leverage Kuoni Group’s global destination expertise and network of business partners in the tourism industry, and HNA Group’s tourism assets and strong distribution network in the Chinese market”.
Kuoni is to cut 350 jobs from its GTS group travel division to make savings of CHF30 million to “rapidly adjust to changed market conditions”.
Kuoni said: “Sales activities will be streamlined, simplified and focused on more profitable customer segments. The existing IT architecture has been reviewed and will be adapted to cater for this.”
Kuoni faces CHF20 million in restructuring costs at GTS this year but expects full year earnings [EBITDA] to come in at CHF52 million.
The Swiss company, which is being transformed into a travel services provider, saw turnover for the summer quarter rise by 8% but the company suffered a loss of CHF121.2 million in the three months to September 30.
A new group chief executive, Zubin Karkaria, has been appointed. He moves from its VFS global visa services division, with former chief executive Peter Meier leaving the business after five years.
Kuoni said: “Peter Meier and the board of directors have agreed it is in the company’s best interests to put its management in new hands.”
In further senior management changes, a new chief financial officer has been appointed.
Prisca Havranek-Kosicek is group treasurer of Dutch health and nutrition company Royal DSM and will join Kuoni in the new year.
Havranek-Kosicek succeeds Thomas Peyer who will leave Kuoni in 2016 after a handover period.
Reviewing the summer quarter, chairman, Heinz Karrer, said: “All divisions recorded positive organic turnover growth in the important summer quarter.
“In particular, the GTD Division recorded a significant increase of operating earnings in the third quarter by more than a quarter compared with the previous year.
“Visa services provider VFS Global posted impressively strong turnover growth.
“GTS Division is being extensively restructured, due to a lack of profitability, triggered by the changed market situation, particularly in the Japanese group travel market.
“The objective is to return the division to profit and increase flexibility so that it can respond quickly to changing market conditions in the future.”
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