Summer surge helps TUI halve losses

A late surge in summer bookings has helped position TUI Travel to comfortably meet expectations for the current financial year.
TUI Travel, Europe’s largest travel firm, said its first quarter underlying operating loss was reduced to £34.9 million from a loss of £63.3 million in the same period the previous year. Revenues rose 9% to £2,746m to £2,523m.It said trading for both summer and winter seasons had improved since it last gave an update at the beginning of February, and were in line with its planned capacity reductions.
The group also said it was reaping the benefits of merger synergies - it had increased its cost savings by £25 million to £200 million per year. It also said it was confident of delivering synergies of £115 million in the current year.

TUI has reported stronger demand across all its key markets in the last month, with UK bookings down 7% against 18% for the season as a whole. It has reduced capacity by 17% and said scope existed to cut this further if necessary.
With the weakness of sterling against the euro, the group reported increased demand for medium-haul destinations such as Egypt (up 18% in the last four weeks) and Turkey (8% up on the same period last year).

Peter Long, CEO TUI Travel, said: “Pricing is strong as we continue to recover our cost input inflation, while consumer demand continues to improve despite the economic conditions, as our customers continue to seek differentiated experiences with trustworthy brands that provide excellent value for money. We have continued to experience greater demand for non-Euro destinations and all-inclusive holidays.”

“I believe that the actions we are taking to manage supply through leveraging our flexible business model, combined with the significant synergy benefits arising in the current financial year, leads us to be well positioned to meet our expectations for the year to 30 September 2009.”