First Choice Holidays saw its losses increase from £76.5 million to £82.5 million year-on-year for the six months to April 30, impacted by £146 million of acquisitions spend and increased fuel and airport passenger duty (APD) costs.
Chief Executive of First Choice Peter Long said the UK market remained “challenging” but summer looked relatively buoyant, with an 8% dip in short haul summer sales offset by a 21% jump in long haul bookings, resulting in “broadly flat” trading.
Long said overall sales for the last two weeks were particularly encouraging, up 21% compared to the same time last year, although the figure is flattered by a favourable comparison to poor 2006 figures.
While the company has continued its strategy of reducing short haul capacity it has maintained its capacity for ‘medium’ haul destinations and is beefing up its long haul options.
Going forward, Long said First Choice would also look to continue its strategy of acquiring niche businesses and growing its Holiday Villages offering.
Earlier this year agreed options on four Boeing Dreamliner 787s to open up new markets and further drive long-haul sales.
Long said the company had continued to gain control over its distribution, selling 62% of its own winter stock and 71% of its summer stock, up from 57% and 66% respectively in 2006, and its new acquisitions were performing well.
Of the seven acquisitions made over the period, group financial director Paul Bowtell said LateRooms had been the standout company, putting in a “stellar” performance and exceeding expectations for each of the six months.
And the acquisition of i-to-i, iExplore Inc and TKJ Pty Ltd, trading as WesternXposure, helped the Activity Holidays Sector put in a strong performance for the six months with revenues up 5% year-on-year.
But the company remained tight-lipped over its merger with TUI and the future for the First Choice brand on the high street.
The merger will create a group with sales of £21.1 billion and generate an anticipated £100 million worth of savings within three years, but Long refused to be drawn on details of where the savings would come from.
The merger is due to get UK Listing Authority approval on June 29 and Long said the company planned to begin trading as TUI Travel by October 1 “at the latest”.