TUI AG has blamed the restructure of its UK business for
reducing profits in its northern Europe division by more than 30
million euros.
The division recorded profits of 65 million euros for 2004,
17.5% or 14 million euros less than the previous year, but said it
had introduced “proactive measures” for the future of its UK
business.
Profits for northern Europe, which includes the UK, would have
been at least 30 million euros higher had it not been for the major
restructure in the UK.
TUI UK announced the restructure last September which led to the
loss of 800 jobs as the operator looked to drive more business
direct and cut distribution costs.
TUI AG chairman Dr Michael Frenzel said of the 30 million euros
drop: “We accepted this as the price to pay for making ourselves
fit for the future from a position of strength in the British
market.”
He added it expected the restructuring measures to produce
“significant yearly improvements” from 2006 onwards.
The northern Europe division – which includes the Nordic
countries and Ireland as well as the UK – reported a 4.6
billion euro turnover for 2004, up 7.8% year-on-year. The UK
accounted for 79% of turnover. The number of UK customers rose by
3.5% to account for 74% of the division’s business.
It also blamed the strength of the euro against the pound for
the drop in profits, but said average prices had improved due to
capacity management.
TUI UK carried 4.66 million passengers in its tour operation
last year, with 3.93 million travelling with Thomson Holidays, a
3.2% growth on the previous year.
Around 730,000 passengers travelled with the Specialist Holidays
Group, which increased by 5.2% on 2003.
It said its 833 UK travel agencies accounted for 65% of sales of
TUI-owned tour operators. The web, its call centre operation and TV
channel accounted for 25% of overall bookings.
Overall, TUI AG group turnover dropped 6.1% to 18 billion euros.
Pre-tax profits doubled to 490 million euros.