TUI Travel takes £90m ash disruption hit

TUI Travel has revealed that the cost of disruption caused by the volcanic ash crisis over 12 days in April has amounted to £90 million.

The company was forced to cancel 175,000 holidays and repatriated 180,000 holidaymakers during the period.

TUI Travel has seen summer booking levels improve this month despite the "unprecedented" ash impact.

Chief executive Peter Long said customers "continue to place great value on their main summer holiday".

He was speaking as the group revealed half year pre-tax losses to March 31 of £367 million, ten per cent worse than the equivalent winter period in  2008-09. However, the company’s second quarter operating loss improved by £47 million.

The cost of the ash disruption will be takedn in the group’s third quarter but TUI hopes to mitigate the losses through government compensation claims for the clsoure of airspace.

"Throughout the crisis we prioritised the needs of our customers, providing industry leading levels of support  and taking enormous efforts to repatriate stranded customers by all methods at our disposal," said Long.

"We firmly believe that our efforts  have further highlighted the advantages of travelling with a leading tour operator and that these benefits have resonated strongly with customers throughout our source markets.

"The new appraoch to the imposition of no-fly zones is based on scientific observations and consultations with engine manufacturers and should mean that any future airspace closures are more tightly targeted and cause substantially less disruption.

"Despite the impact of the disruption, I expect positive momentum in the second half of the year as strong underlying demand improves trading and merger synergies continue to be delivered."

Bookings from the UK for the peak month of August are nine per cent ahead of last year, with an overall summer laod factor currently standing at 56% – in line with last year – despite a three per cent rise in capacity.

Overall booking volumes for the whole summer are uo by four per cent with average selling prices up by ten per cent.

This has been helped by people booking earlier, particularly for peak summer dates to ensure they secure their preferred  hotel.

Specialist holiday sector sales are down five per cent overall, with weakness in sales of long haul  packages on scheduled flights partially offset by demand in businesses in the US. 

Activity sector sales are nine per cent ahead of the same time last year, while online  B2C and B2B roomnight sales are up by 40%. 

by Phil Davies