A weak UK performance has impacted annual profits for TUI Travel, but the group still managed to grow underlying operating profits by 11%
For the year to the end of September, the tour operator reported operating profit of £447 million, excluding the estimated £104 million cost of the ash cloud crisis.
Taking the ash cloud and other one-off costs into account, TUI made a pre-tax loss of £36 million, compared to a loss of £94 million the year before.
Overall group sales were down 2% to £13.5 billion.
The UK and Ireland business made an underlying operating profit of £127 million – down from £142 million in the previous year.
Chief executive Peter Long said: “The 2010 result was affected by a weaker trading performance in the UK, primarily due to increased winter losses resulting from capacity-led volume reductions in anticipation of lower demand.
“The early summer period was disrupted by a number of factors that increased customer uncertainty, including the volcanic ash related airspace closures. We then experienced an improvement in demand later in the summer period and trading closed out well in all source markets, including the UK."
He said the company was cautious about 2011.
“We have seen sustained improvement in demand since July and recent trading for future seasons remains positive in most source markets,” he said.
“While current booking activity is good, driven by demand for our differentiated products, we remain cautious about 2011 given the continued economic uncertainty and the relatively early stage of the booking cycle.”
By Bev Fearis
