First Choice posts wider losses

First Choice has posted a greater net loss for the first half of 2007 due to higher fuel costs, the impact of Air Passenger Duty and investment in its long-haul program.
The firms net losses for the six months to April 30 widened to £74.9 million from £57.8 million a year earlier. Revenue rose 5.9 percent to £1.0 billion.

First Choice is in the process of merging with Germany’s TUI AG’s tourism unit to create Europe’s biggest tour operator.The merged entity will be called TUI Travel PLC.

The company said trading for its key summer season had been in line with its expectations in the past six weeks. It has added capacity to its long-haul destinations to meet increased demand and cut capacity in short-haul.

“In Mainstream Holidays our performance has tracked in line with our expectations in what remains a challenging market, with revenues now cumulatively up +3% on flat volumes,” the company said.

For summer 2007, First Choice said mainstream holidays sector revenues are up 3 percent, with long-haul revenues and bookings up 26 percent and 21 percent respectively.

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The company anticipates margins in the mainstream division will remain under pressure as the impact of the rise in Air Passenger Duty (APD) and year-on-year increase in fuel costs affects its ability to recover the additional costs incurred.

Specialist holidays sector revenues and bookings are ahead of last year by 18 percent and 16 percent respectively, while activity holidays sector revenues are up by 5 percent on a like-for-like basis.

Online destination services bednight bookings are up 32 percent on the prior year with Laterooms.com bednights and revenues up 73 percent and 78 percent respectively.

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