TUI summer passengers down 15%

TUI Travel’s total customers for the summer are down by 15% down year-on-year based on capacity trimmed by 14%, according to majority shareholder TUI AG.

Booked turnover at Europe’s largest travel group is 13% down.

The company described current summer trading as “developing in line with expectations”.

A final assessment of the extent to which the effects of the swine flu will impact TUI Travel and the hotel business cannot yet be provided, a statement from TUI AG said.

Average selling prices in the UK have remained 10% ahead of last year for the summer with volumes in line with capacity reductions.

As a result the programme load factor is now 58%, which is flat versus last year.

Recent trading continues to show improvement versus the cumulative position, with volumes in the last eight weeks down 11% compared to cumulative bookings down 17%.

In recent weeks, demand for long haul holidays has been "particularly strong" despite the outbreak of swine flu in Mexico, with bookings up two per cent in the last two weeks compared to cumulative bookings down 25%.

Demand has switched from Mexico to other medium and long haul destinations, particularly Jamaica (+30% in the last two weeks), Egypt (+23%) and the Dominican Republic (+19%).

Of the around 2,500 holidaymakers in Mexico at the time of the outbreak, only about10% accepted our offer of early repatriation, the company revealed.

The trend towards non-euro destinations continues, especially to Egypt and Turkey, with the non-euro destination mix up three points to 32%.

Demand continues to be strong for differentiated content (mix up six points to 34%) and all-inclusives (mix up four points to 33%) as customers continue to seek value for money differentiated experiences, TUI Travel said.

The figures show overall bookings for summer from the UK down by 17% based on capacity reduced by the same level.

“The special one-off effects arising in the first quarter will be followed by sustainable integration synergies as the year progresses. Provided the summer business will be good, overall earnings are therefore expected to improve slightly.”

Underlying EBITA by the tourism division declined by a quarter in the first three months of the year to a loss of 276 million euros against – 221 million euros a year earlier.

Turnover by TUI Travel declined by almost 16% year-on-year to 2.9 billion euro in the first quarter.

The decrease was attributable to capacity reductions in the mainstream segment and the year-on-year weakening of the exchange rate of the British pound sterling against the euro, the company said.

“Thanks to active capacity management, the expected decline in demand caused by the economic crisis was cushioned,” the first quarter earnings statement said.

“Both pricing and load factors of the contracted capacity were maintained at high levels despite a softening in bookings.”

TUI said it expected an overall decline in turnover due to a fall in business volumes and a “persistently weak” exchange rate of the British pound sterling.

“Operating earnings by tourism are expected to show an overall stable development.”

TUI Travel PLC financial information for the six months ending March 31 will be reported on May19.

by Phil Davies