Troubled tour operator MyTravel's former chief executive is to get a £1.2 million pay-off after departing the group last year.

Tim Byrne's settlement came to light as the former Airtours company, which owns Hove-based Panorama and Manos Holidays, said bookings had deteriorated in recent weeks because of the Iraq crisis.

MyTravel has endured a torrid year, with losses of £72.8 million because of the impact of September 11 and a charge to cover accounting errors.

It was dubbed the worst year in the company's history by founder David Crossland.

The year culminated in the departures of Mr Byrne, finance director David Jardine and Richard Carrick, chief executive of the development division.

As well as Mr Byrne's settlement of £1.2 million, MyTravel told shareholders yesterday that Mr Jardine stood to get a settlement worth £840,000 and Mr Carrick would pick up a leaving package of £630,000.

The company said: "These amounts were agreed in the light of the very clear legal advice that these negotiated settlements resulted in a better outcome for the company than was likely to be achieved through a process of protracted litigation."

MyTravel added notice terms were now reduced from two years to one, including for new chief executive Peter McHugh and finance director Kazia Kantor.

Despite market conditions, Mr McHugh said the company had 500,000 fewer UK summer holidays left to sell than at the same point last year.

Bookings for the period are three per cent ahead of 2001, although the company took action in the face of conditions to reduce capacity by eight per cent.

Mr McHugh said: "Since November, trading has been difficult and in recent weeks bookings have deteriorated.

"Current conditions make it difficult to comment with any certainty on the outlook for the rest of the year."

The company used yesterday's annual meeting in Manchester to update shareholders on progress in improving its fortunes.

This has included 700 extra job cuts, although MyTravel dismissed reports it was planning to reduce the size of its retail portfolio in the UK through the closure of 260 Going Places stores.

MyTravel confirmed it had received interest from several parties about buying its Cresta brand.