Tour operator MyTravel promised a significant improvement in annual results after seeing its UK division achieve a profitable summer season.
The trading update came as the former Airtours company said it was meeting lending banks to discuss a restructuring that could tackle £1.3bn of debt but also cause a very significant dilution of shareholder interests.
The proposed debt-for-equity swap has been under consideration for most of the year.
Chief executive Peter McHugh forecast MyTravel's operating result for the 12 months to September 30 would approach break-even.
He said: "We are making good progress towards achieving the turnaround and we are targeting further trading improvement in 2004/2005."
The company, which includes the Going Places and Cresta brands, has sold a number of businesses and cut hundreds of jobs to ensure capacity more closely-matched demand.
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