Prices and passengers up for TUI UK

Increased prices and passenger carryings were recorded by TUI UK in the crucial peak summer months.

The UK arm of the German travel conglomerate contributed 75% of the 1.77 billion euros third quarter turnover achieved by its Northern Europe division, which also includes Britannia Airways, Ireland and the Nordic countries. This was a rise of almost six per cent on the same period last year.

A TUI statement said: “Around three quarters of this growth was generated in the UK, where both customer numbers rose and higher prices were achieved.”

But third quarter profits of 194 million euros for TUI Northern Europe were down on the 230 million euros figure for the same period last year.

TUI said: “Whereas flight operations generated good, stable results in the UK, the strength of the euro against the British pound sterling adversely affected the operating costs of the tour operators.”

TUI UK, which includes the Thomson Holidays tour operations, Specialist Holidays Group and Lunn Poly, is undergoing a cost-cutting programme which will see hundreds of jobs go, the agency chain rebranded and the head office move from London to Luton next year.

According to figures released today, the German group’s Northern Europe sector improved its performance in the first three quarters of 2004 with accumulated profits of 142 million euros against 132 million euros year-on-year.

TUI’s tourism division overall increased its earnings by 14% to 572 million euros in the third quarter, which the company put down to a good summer season. The division generated accumulated profits of 487 million euros in the first nine months – an increase of 62 per cent or 186 million euros year-on-year.

The company said: “Turnover in the tourism division grew significantly more strongly than customer numbers, a trend confirming an overall improvement in price levels.”

Meanwhile, TUI’s low-cost carriers Hapag-Lloyd Express and Thomsonfly generated quarterly turnover of 64 million euros, up from 39 million euros, and produced joint profits of one million euros against a loss of 10 million euros. In the first three quarters, the turnover of the two low-cost airlines totalled 142 million euros, up from 81 million euros.

TUI chief executive Michael Frenzel said: “We are proud of the strong business trends in our core businesses tourism and shipping. The third quarter of 2004 represents one of the best quarterly results ever and confirms impressively the earnings power of our integrated business model in tourism.

“We are well on track. The business development of our divisions clearly confirms our expectation that earnings bu division, adjusted for unusual expenses and income, for the 2004 financial year will total at least 420 million euros, following 242 million euros in the previous year.”

Report by Phil Davies