MYTRAVEL was once East Lancashire's biggest-ever corporate success story.

But rocked by a £50 million profits warning, shares in the travel company, better known as Airtours, nosedived to an all-time low yesterday.

Business Editor Andrew Calvert looks at the background to the company's fall from grace and the implications for its 600 employees in Accrington and Helmshore...

IN February this year, MyTravel founder David Crossland was looking forward to retirement.

The one-time office tea-boy had announced he was stepping down in November as chairman of the global holiday empire that grew from a single travel agency in Burnley.

After 30 years, he had amassed a multi-million fortune.

His shares in the business were then worth £139 million and it appeared that the company had overcome the international travel slump that followed September 11.

Today, his hopes of a quiet life are in tatters after MyTravel's share price went into a tailspin following the company's third profits warning in less than six months. More than £200 million was wiped off the value of the company and Mr Crossland's own shareholding dipped below £10 million at one time, losing him around £27 million.

He has had to abandon plans for retirement and is now leading the recovery of a business that had once been the star of the Stock Market.

So, just what has gone wrong at the company that was once poised to become a world leader in the holiday market?

Since the start of the year, when it was trading as high as 285p, MyTravel has seen more than 90 per cent of its value wiped out by the series of earnings alerts. Just under a week ago, the company's chief executive Tim Byrne bowed to investor pressure and quit the company with a £1mlllion pay-off.

Analysts in the City are now suggesting that this latest setback will probably precipitate the departure of finance director David Jardine.

At current market valuations, MyTravel is worth less than £100 million and it is seen as a prime takeover target.

First Choice Holidays PLC, ironically once an Airtours target, is seen as a potential buyer of the group, as is TUI of Germany, which owns the Thomson Holidays brand. Analysts said any predator would probably wait until MyTravel unveiled its report and accounts in November before making a play.

"The shares are likely to be further depressed on this news and any white knights may decide to stay on the sidelines until they can be sure that this company has a future," said WestLB's James Hollins.

"However, given the accounting irregularities, the underlying value of the business is in question, " the analyst added.

MyTravel's third profit warning came just weeks before the company was due to declare its annual results.

Brokers expect the company to report full-year pre-tax profits of around £40 million, down from forecasts of around £90 million before yesterday's warning and £120 million at the earnings alert before that.

Since a full-year trading update on September 30, "a number of additional matters have come to light," the company said in a statement to the Stock Exchange.

A downgrade of £12 million was blamed on a worse-than-anticipated end to the summer season and £8 million was attributed to a problem reconciling the UK accounts.

In addition, the company said it had identified revisions to accounting estimates of up to £30 mlllion.

A defiant David Crossland has pledged to put the business back on track and has appointed a new senior management team.

He has instigated a detailed review of the group's commercial activities and financial processes and has promised a report at the end of November.

"I have made immediate changes and have a strong team to get the business back on track," he said.