Summer earnings drop for TUI UK

TUI AG has reported a rise in passenger volumes and pricing for its UK tour operations for summer 2004 but overall earnings are down on last year, blamed on the strength of the euro.

Earnings for Northern Europe – which comprises the UK and Ireland, the Nordic countries and Britannia Airways – for the three months ending September 30 were 194 million euros, down from 230 million euros on 2003.

In its report, the company said the strength of the euro against the pound “adversely impacted” the operating costs of its UK tour operators.

TUI UK tour operations carried 2% more passengers this summer at 1.75 million, with a strong period of late bookings in August.

However, earnings before interest, tax, depreciation and amortisation for Northern Europe tour operations were 217 million euros, down from 249 million euros for the same period last year.

It said holidays to long-haul destinations had been boosted as a result of the weak dollar. However, Spain had been hit by the high cost for British holidaymakers, with bookings on a par for the Balearics and mainland destinations but falling for the Canary Islands.

Low-cost destinations such as Turkey and emerging resorts in eastern Europe, in particular Bulgaria, had seen a growth, it reported.

It has increased its level of directional selling, shifting 71% of its own product during from July to September.

Britannia Airways UK also increased carryings by 5%, with a load factor of more than 95%.

Winter 2004/05 bookings are also up on last year, it said.