TUI Travel reported an underlying profit on its operations of £102 million for the three months to the end of June, but an overall loss for the past nine months of £304 million.
However, TUI Travel chief executive Peter Long expressed satisfaction with the group’s trading performance. “We remain well positioned to meet the board’s expectations for the year ending September 30,” he said.
The group reported sales this summer in line with its forecasts, as bookings come in closer to departure. Sales volumes were “tracking ahead of capacity reductions across most source markets”.
The number of mainstream UK customers was 12% down on a year ago against a capacity reduction of 16%, with average selling prices 7% ahead of last year. Sales in TUI Travel’s biggest market, Germany, were 12% down year on year against a similar capacity reduction of 16%.
The swine flu outbreak in Mexico in April cost the UK division an estimated £7 million in compensation and cancellations, but the group reported a strong recovery to the destination with bookings up 27% year on year in July.
Bookings for this winter were down 21% year on year, but with average selling prices 9% up, while sales for summer 2010 were “in line with the prior year” despite the programme being launched two months later than a year ago.
A company statement said: “Lates trading in the current season gives us confidence that holiday demand remains strong.”
However, Long added: “We anticipate market conditions will remain challenging and expect the later booking pattern to continue in the next financial year.”
The underlying group profit of £102 million for the three months owed a considerable amount to continuing savings from the merger that formed TUI Travel two years ago and the fact that Easter fell within the quarter. The group posted an £187 million underlying loss on its operations for the nine months to June, on a turnover of £8.95 billion.