TUI Travel made a £398 million underlying profit on its operations for the year to the end of September, but a series of one-off costs led it to report an overall loss of £266.6 million for the 12 months.
Factors pushing TUI Travel’s figures into the red included £164 million in integration costs, £65 million of restructuring expenses and £151 million in a write-down of its aircraft assets
However, Europe’s biggest travel group reported underlying pre-tax profits up 43% year on year to £319.7 million from £222.8 million in 2007.
The group, created last year by the merger of TUI and First Choice, reported additional savings of £25 million following better-than-expected progress in merging the businesses – increasing total savings expected from the merger from £150 million to £175 million. Most of the added savings have come from the UK, as a result of improved airline network planning.
TUI Travel reported a strong trading performance in the UK, with underlying profits up by £76.5 million to £132.9 million as a result of tight capacity control, the elimination of loss-making routes and savings from integrating the businesses.
Chief executive Peter Long said: “We are delighted that in our first year as a merged company we have achieved significantly improved profitablility across the business.”
Reporting on trading for this winter, the group said average selling prices in its UK charter business were up 10% following significant capacity reduction. Volumes for next summer are down 17%, but average selling prices are up 10% year on year following a capacity reduction of 16%.
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