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First Choice reduces winter losses
An increase in long haul travel and a reduction in overall capacity has helped First Choice reduce its pre-tax winter losses by £6 million to £34.1 million.
Although short haul winter business fell 15% in the six months to April 30, long haul sales rose 6% with overall turnover in mainstream holidays up 5% to £322 million.
Losses in the sector, which included £0.5 million as a result of the tsunami, reduced by £1 million to £32 million.
The performance was also aided by the elimination of the £4.1 million winter loss its in its three specialist sectors.
Chief executive Peter Long said the improved results – the company’s third consecutive reduction in winter losses – also reflects a continuing shift away from the volatile and low margin flight-only market with passenger numbers down 14%.
“We have continued to re-mix our business and concentrated on offering exclusive differentiated product in short, medium and long haul destinations,” he said.
Further moves would be made to cut its winter cost base, he added.
Long revealed current trading was strong with mainstream holidays up 11% for summer 2005, specialist holidays up 33% and activity holidays, excluding ski, up 8%.
“Supply and demand looks better balanced than has historically been the case,” he said.
Long pinpointed its online businesses as an area of “significant growth opportunities” with turnover in the first six months rising 87% to £102 million and cumulative bed nights up 151%.
Almost a quarter of summer 2005 sales are online, he added.
The trend ties in with the operator’s aim to further increase the number of First Choice holidays sold in-house.
“For summer 2005 we are making further increases in the percentage of holidays we are selling through our own shops, hypermarkets, online and call centres,” said Long.
Report by Steve Jones
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