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TUI Travel sees 5% profits rise – capacity slashed for ’08
TUI Travel today revealed a £287 million operating profit, up 5% on the 2006 figure.
The result for the merged TUI UK and First Choice businesses came despite a decline in mainstream holiday profitability, down by 12% to £162 million.
However, underlying operating profit in specialist sectors was up by 36% to £129 million.
The profit decline in mainstream was attributed to “significant cost pressures” in the UK due to Air Passenger Duty and fuel that were not fully recovered from customers.
The group said mainstream revenues were picking up, with UK winter sales up 5% and next summer showing an 11% rise.
This is based on capacity cut mainly in short haul by 30% at Thomson and 22% at First Choice for the winter and a total reduction of 25% for summer 2008 including Thomson short haul flying trimmed by 30%.
CEO Peter Long said he was “encouraged” by the performance to date in the approach to the key winter and summer 2008 booking period.
“The integration process continues to advance as planned with excellent progress made in the UK and across other businesses,” he said.
The figures for the year to September compare to £270 million operating profits recorded by the merged Thomas Cook/MyTravel operations.
by Phil Davies
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