The newly-merged Tui Group today reported a good start to the 2014/15 financial year with a 15% cut in first quarter winter losses to €120 million.
The travel giant’s hotels and resorts division delivered a “significant increase” in profits in the period to the end of December and said it was confident of delivering full year operating profit growth of up to 15%.
The group has sold 32% of its summer 2015 programme – similar to this time last year.
Selling prices are up by 1% in the UK, which has seen 38% of the summer programme sold, a 4% improvement year-on-year.
However, Tui said overall mainstream bookings are down by 1%.
The current winter season is 84% sold, with strong pricing across most of the group’s source markets. Mainstream bookings are up by 1% following capacity cuts in the Nordic region and France.
“We are pleased with overall trading to date, although in Germany, we are experiencing some margin pressure in the Canaries, which forms a significant part of our winter programme,” Tui said.
Tui Group chief executives Friedrich Joussen and Peter Long said in a joint statement: “We are delighted to announce our first set of results as Tui Group, having delivered 15% improvement in the underlying operating result.
“This reflects a significant increase in profitability in Hotels & Resorts and Cruises. The Travel result is in line with our expectations.
“We have continued to grow unique holidays and online bookings across all key source markets and expect to deliver growth in the underlying operating result in the remainder of the year.
“Following completion of the merger between Tui AG and Tui Travel PLC in December 2014, the integration of our businesses is well underway, with a new executive committee in place.
“Based on this result and our current trading, we remain confident of delivering full year underlying operating profit growth of 10% to 15%.”
The company said it was evaluating options to manage non-mainstream for growth and value
“We remain committed to exiting our remaining shareholding in Hapag-Lloyd AG, through either IPO or trade sale,” Tui added.
Tui revealed an “excellent” online performance with mainstream Summer 2015 online bookings up by 8 %.
The company reported a continued growth in sales of unique holidays, which currently account for 78 % of mainstream summer 2015 bookings.
An update on Tui’s strategy, setting out its plans for growth, is due to be given on May 13 when half year interim results are to be published.
Reviewing the quarter, the group said: “The performance of Tui tour operators in the UK was in line with the prior year.
“Customers departing during the quarter increased by 3.9 %, driven by the stronger demand for the expanded long-haul programme and growth in unique offering.
“Unique holidays accounted for 86 % of departures, up 1 percentage point on Q1 2013/14. There was also good growth in online bookings, which accounted for 53% of all bookings, up 3 percentage points year-on-year.”
The quarterly figures reveal that overall staff numbers have been cut by more than 15% since September from 77,309 to 65,278.