Economic uncertainty is producing a package-holiday revival, says TUI Travel chief executive Peter Long.

Reporting strong underlying results for the year to September, the head of Europe’s biggest travel group said: “We are seeing a renaissance in package-tour operating. People want security and certainty.”

Long reported an underlying annual profit of almost £320 million despite a series of one-off costs and write-downs in assets leading to an overall loss, and said he was upbeat about prospects for the coming year.

“I have been in tour operating 25 years and seen four or five shocks, including two recessions,” he said. “Consolidation last year was pivotal – the industry is in better shape – and our flexibility enables us to manage capacity. We can add or take out capacity in line with demand.”

There were four major travel groups in the UK little more than a year ago – now there are just two following the mergers of TUI with First Choice to form TUI Travel, and Thomas Cook with MyTravel.

TUI Travel has reduced its holidays on offer in the UK next summer by 16% year on year, but reports average selling prices 10% up on a year ago.

Long said: “Customers who are out of a job will not be able to afford a holiday. But we have taken 16% of capacity out. That will more than offset any reduction in demand.”

He added: “I am confident we can achieve continuing profitability despite the challenging environment.”

Long said demand for Egypt and Turkey was booming at the expense of the Caribbean and Florida.