TUI Travel has seen profits fall by 16 per cent in the third financial quarter, as the early Easter holiday disrupted trading.
Net operating profit stood at £74 million for the period, with weakness in the French and other European economies also taking a toll.
TUI Travel operates the Thomson and First Choice brands.
In the three months to the end of June, group revenues fell two per cent to £3.69 billion, while the operating margin dropped to 0.3 points to two percent.
“Summer 2012 volumes have improved in most key markets since our last update,” said TUI Travel chief executive Peter Long.
“We are seeing strong demand and late margins for the peak summer period.
“Our winter 2012/2013 programme has had an encouraging start.”
The company said the UK, the Nordic region and Germany had all delivered solid growth during the period but that its French business continues to underperform.