TUI Travel profits surge on merger benefits
Europe’s biggest travel firm TUI Travel saw full year pre-tax profits rise by 43 per cent.
The group, created last year from the tie-up between TUI AG’s travel division and First Choice, made a pre-tax profit for the year to Sept 30 of £319.7 million, compared with a proforma figure of £222.8 million the year before.
The increase came as the Thomson parent group benefited from a strong performance in the UK and merger synergies.
The UK and Ireland division saw underlying profits rise by £76.5 million to £132.9 million as loss-making scheduled flying was cut for last winter by 22% and 43% in summer while total charter capacity came down by 5% and 7% respectively.
The group is seeing “encouraging” early sales for summer 2009 with UK charter averge selling prices up by 10%.
Capacity from the UK for next summer has been cut by 16%, with volumes down by 17% on selling pirces up by 10% year-on-year.
The company said it was continuing to focus on managing capacity “in anticipation of a weaker early booking environment”.
Synergy savings are now expected to rise by £25 million to £175 million.
But the company revealed that underlying profits at Island Cruises dropped by £400,000 due to softer demand in the UK cruise market resulting in the business being unable to pass on “higher input costs” to the customer.
TUI has since agreed but buy out the half share in Island Cruises from Royal Caribbean and will retain one of its two ships, the Island Star, which is to be integrated into the Thomson Cruises fleet.
The group acquired 16 companies in the past year worth £108.6 million.
Chief executive Peter Long said: “Our customers continue to regard their main holiday as an essential, not a luxury, which they are reluctant to forgo.
“More than ever they want to book their holidays with trustworthy brands that provide excellent value for money.”
He added: “I believe that the actions we are taking to manage supply and accelerate the synergy benefits puts us in strong position to manage the current economic environment and continue to meet our expectations for 2009.”
The group believes it can outperform the market in 2009 and 2010 through a mix of its fuel hedging, capacity management, brand leadership and management experience.
by Phil Davies
Phil Davies
Vegas’s Billion-Dollar Secrets – What They Don’t Want Tourists to Know
Visit Florida’s New CEO Bryan Griffin Shares His Vision for State Tourism with Graham
Chicago’s Tourism Renaissance: Graham Interviews Kristin Reynolds of Choose Chicago
Graham Talks with Cassandra McCauley of MMGY NextFactor About the Latest Industry Research
Destination International’s Andreas Weissenborn: Research, Advocacy, and Destination Impact
Graham and Don Welsh Discuss the Success of Destinations International’s Annual Conference
Graham and CEO Andre Kiwitz on Ventura Travel’s UK Move and Recruitment for the Role
Brett Laiken and Graham Discuss Florida’s Tourism Momentum and Global Appeal
Graham and Elliot Ferguson on Positioning DC as a Cultural and Inclusive Global Destination
Graham Talks to Fraser Last About His England-to-Ireland Trek for Mental Health Awareness
Kathy Nelson Tells Graham About the Honour of Hosting the World Cup and Kansas City’s Future
Graham McKenzie on Sir Richie Richardson’s Dual Passion for Golf and His Homeland, Antigua
ADS PRO 
TAP Air Portugal to operate 29 flights due to strike on December 11
Qatar Airways offers flexible payment options for European travellers
Airlines suspend Madagascar services following unrest and army revolt
Strike action set to cause travel chaos at Brussels airports
Digital Travel Reporter of the Mirror totally seduced by HotelPlanner AI Travel Agent