2nd UPDATE: TUI Travel Says Demand Is Continuing To Improve
24 März 2010 - 9:50AM
Dow Jones News
U.K.-based travel operator TUI Travel PLC (TT.LN) Wednesday said
demand for leisure holidays was continuing to improve strongly and
it's well positioned to meet the board's expectations for the
current fiscal year ending Sep. 30.
Europe's biggest travel operator by market capitalization had
said in early February that bookings were improving, and Wednesday
said they had continued to improve since then. Cumulative bookings
in the U.K., its biggest market are up 13% in the six weeks to Mar.
14, and have risen 23% in the Nordics.
Like rival Thomas Cook Group PLC (TCG.LN), TUI Travel was hit
hard by the economic downturn, seeing revenues decline as it cut
the number of holidays on offer in response to the fall in demand.
The reduction in capacity helped the companies protect their prices
and margins.
TUI Travel Chief Executive Peter Long has put the recovery down
to consumers being more confident about keeping their jobs, coupled
with recent snow and poor summer weather encouraging people to
travel abroad.
TUI Travel, whose brands include Thomson, First Choice and
Airtours, said it had sold almost all the available holidays for
this winter, and had experienced strong prices for late bookings
because few holidays remained. It added that it had achieved
planned load factors. The winter season runs until the end of
April.
For the summer, trading remains strong, with improvements in
cumulative booking volumes in most source markets in recent
weeks.
It said average selling prices are up 9% on the year in the
U.K., while it has further increased capcity in the Nordics--now up
12% compared with the previous 11% increase. It said it had done
this through additional deals with third-party airlines, which
remain flexible.
In early February, the company had said it expected
profitability to improve each quarter this year due to improving
demand, its exit from scheduled flying in Germany, benefits from
its venture in Canada and thanks to further synergies from the
merger that created the company.
It reiterated that it expects to make "significant progress" in
the second quarter for these reasons, and is well positioned to
meet the board's expectations for the fiscal year.
"We are encouraged by recent strong trading trends and are
confident as we move towards the summer season that we will
continue to see strong demand and a recovery in earlier booking
patterns," it said.
At 0812 GMT, TUI Travel's shares were up 6 pence, or 2%, at 310
pence, the third-biggest percentage increase on the FTSE 100, which
was up 0.4%. The stock has risen 21% in the year to date on hopes
for an improvement in the travel market.
Thomas Cook had the biggest gain on the index Wednesday, up 3%.
Its stock has risen 14% so far this year.
-By Steve McGrath, Dow Jones Newswires; 44-20-7842-9284;
steve.mcgrath@dowjones.com
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