MyTravel has reported an expected return to profit, after the holiday firm posted a loss for the last five years. It comes as it talks with rival First Choice on purchasing its package holidays business.

The company says it expects between 18 million and 20 million Britons to book annual package holidays over the coming years, Chief Executive Peter McHugh told reporters.

“In the U.K., trading conditions remain challenging and we continue to see a trend to later booking,” Peter McHugh, chief executive told reporters.

“In Northern Europe, the booking season started slowly but has improved in recent weeks and is encouraging.”

For the year to October 31 2006 the group made a profit before tax of £43.8 million. This compares with a loss in the prior year of £17.4 million.

The return to profitability comes despite a difficult summer of trading, particularly in the U.K., which was compounded by the U.K. travel security alert in August and the terrorist incidents in Turkey and Jordan.

It also comes despite year on year increases in the prices of fuel and foreign currency.

Market conditions in the U.K. for summer 06 were already difficult as a result of the World Cup and the record high temperatures in the U.K.

As a result, sales volumes through to the end of July were down 3% on 1.4% less capacity, and average selling prices were up 2%.

At the beginning of August it had approximately 300,000 holidays left to sell.

Following the U.K. security alert in August, there was a significant fall in demand for the remainder of the summer and as such prices had to be heavily discounted to stimulate sales.

This resulted in average selling prices achieved in August, September and October for travel in those months being 10% below the prior year.
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