TUI Travel cuts first-quarter losses

TUI Travel has confirmed it should meet its increased savings target of £150 million by 2010 from its merger with First Choice.

It reported its first quarter losses cut by two-thirds from 2007 to £41m.

The reduction in loss has been driven by a £49 million improvement in mainstream holidays while in the specialist sectors a loss of £3 million in the first quarter of 2007 has been converted into a £2 million profit this year.

The group added sales remain strong and are up 4% for winter 2007/08 while sales for summer 2008 are 9% ahead of this time last year with 20% less product to sell.

It said its acquisition pipeline remains strong following the acquisition of four niche businesses in the first quarter at a cost of £21 million.

TUI Travel chief executive Peter Long said: “We are very pleased with our performance during quarter one, our first as a fully merged business. We have made excellent progress in our initiatives to enhance margins throughout the group and have continued to grow our portfolio of niche specialist businesses.

“The integration of our UK mainstream brands, Thomson and First Choice, and our plans to deliver £150 million of synergies by 2010 are well on track.

“Current trading remains strong across the group for both winter 2007/08 and summer 08 and combined with careful management of capacity, means we have significantly fewer holidays to sell than at this point last year in our key source markets.”

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