Tour operator TUI Travel Plc (TT.L) Thursday said strong demand, improved yield and load factors helped boost its winter trading in the UK. The company also said summer volumes have improved in all key markets of the UK, Nordics and Germany since its last update and that its overall trading remains in line with expectations.
The update comes a day after its troubled peer Thomas Cook Group Plc (TCG.L, TCKGY.PK) said it continues to expect fiscal 2012 to be a challenging year, citing the economic backdrop and difficult trading environment particularly for winter. Thomas Cook has also experienced improvement in UK booking trends in the last few weeks.
Peter Long, chief executive of TUI said, "We are pleased with our Winter performance, particularly in the UK, where our focus on differentiated product and online distribution is resulting in us out-performing the market. Summer 2012 volumes have improved in all key markets since our last update."
In the trading update ahead of its first half ending March 31, 2012, TUI Travel noted that Winter programmes across all markets are almost fully sold. In the UK, booked load factor is currently 90 percent, which is slightly ahead from the previous year. Average selling prices increased 4 percent.
Detailing Summer 2012, the company said trading performance was pleasing in all of its key markets except France. Trading in the UK continues to outperform the market, with 48 percent of the programme sold to date, which is in line with the prior year. The UK Summer 2012 currently account for 63 percent of UK bookings, up 7 percentage points on the prior year, the company said.
Nordics, with 78 percent bookings, improved 5 percentage points from the prior year. However, demand for North Africa remains weak and in particular France remains weak, the company noted. Trading in France was challenging and impacted volumes for the early part of the Summer season, partly due to the impact of the coming Presidential elections.
In UK, cumulative bookings at March 25 declined 6 percent, and Nordic region bookings were down 2 percent from last year. In Germany, bookings were flat with last year and France tour operators bookings dropped 17 percent from the same period last year.
In addition, the company said it estimates fuel costs in 2013 to increase by about 10 percent at current market rates.
"Demand for our differentiated product continues to increase and we remain confident in the flexibility of our business model to match profitable demand and deliver clear self-help measures through the business improvement programme," TUI stated.
The company is scheduled to report its interim results for the first half ending March 31, on May 8.
TT.L is currently trading at 195.6 pence, down 0.91 percent, on a volume of 499 thousand shares on the LSE.
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by RTT Staff Writer
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