TUI Travel Plc (TT.L) said Monday it was optimistic in meeting the Board's expectations for the years ending September 30, 2008 and September 30, 2009. Further, the company noted that the current trading in activity and online businesses were in line with expectations.
TUI said that trading in summer 2008 had progressed as anticipated. In the U.K, the company entered the 'lates' booking period with less stock to sell, reflecting capacity reductions and strong rate of sale. This has made the company reduce the level of discounting compared to previous years. Total sales in UK were 94%, three percentage points higher than the preceding year.
Further, the company said that across the European markets, strong pricing was experienced in the 'lates' booking period.
For the winter of 2008 and 2009, the company anticipates lower levels of supply in Europe, particularly in the UK, primarily due to elimination of unprofitable capacity and reduction in the number of competitors.
Within the UK, the average selling price for charter holidays was up 7%, while capacity decreased 6%. The company said the total UK programme was 33% sold, three percentage points higher than the previous year.
In pre close trading, sales in the Specialist and Activity sectors were up 1% and 5% respectively, with total transaction values up 36%. The Group is now 87% hedged on fuel, 95% hedged on the Euro and 91% on US dollar requirements for the Winter season.
For the summer of 2009, the company said the total UK programme was 12% sold, in line with the prior year. The Group is now 78% hedged on fuel, 84% hedged on the Euro and 76% on US dollar requirements for the Summer season, and well positioned to benefit from the fall in oil prices.
The company confirmed that Thomas Group Plc had withdrawn from discussions with Lufthansa AG and TUI Travel, regarding the merger of Condor, Germanwings and TUIfly.
Looking ahead, the company said it is confident in meeting the Board's expectations for 2008 and 2009, underpinned by current trading and the flexibility in its business model.
TT.L is currently trading on the London Stock Exchange at 215.50 pence, down 5.50 pence, or 2.49%, on a volume of 1.54 million shares.
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