Tui Travel cuts losses and reports strong month
Tui Travel has cut its first quarter underlying operating loss by 7% as it benefits from capacity management and the restructuring of its French division.
In what is traditionally a loss-making period for travel companies, the tour operator reported an operating loss of £108 million (€130 million) for the quarter, down from £116 million in the previous year. Revenues remained flat at £2.7 billion.
The travel giant remains confident it can deliver full-year underlying operating profit growth of between 7% and 10%.
The result in the Nordics was down on last year, but in Germany Tui reported “robust trading margins”. Tui’s French operation, which has caused problems in recent years, reported a decrease in operating loss.
In the UK, Tui’s differentiated “unique” holidays accounted for 85% of departures in Q1, a rise of four percentage points. There was also a three percentage point increase in direct distribution, which now stands at 90%. Online bookings accounted for half of all bookings in the period, up six percentage points.
Also improving is the Specialist and Activity Sector, where underlying operating losses were cut from £22 million to £16 million.
“We are very pleased with our current position having reduced the operating loss in the first quarter against a strong prior year performance,” Tui Travel’s chief executive, Peter Long, said.
[pictured: Mountain near St Moritz, Switzerland; © 2009 TUI AG]