TUI TRAVEL reported a better than expected loss in the first half yesterday, driven by a strong performance in Germany and a jump in online bookings, which helped offset the impact of the late Easter this year.
The owner of Thomson and First Choice posted an operating loss of £298m compared with a £289m loss the previous year. When excluding the impact of Easter, which fell in April and so outside the company’s first half, Tui said losses narrowed to £277m.
Tui makes most of its profits over the second half of the year, when customers tend to book their summer holidays. It confirmed it is on track to meet full-year targets, with analysts forecasting pre-tax profits of around £515m.
“We have delivered a strong performance in the first half, driven by our flexible and resilient business model,” chief executive Peter Long said.
“Overall, we are pleased with summer 2014 trading, against strong comparatives, and we remain confident of delivering seven per cent to 10 per cent growth in underlying operating profit during the year on a constant currency basis,” Long added.
The group reduced losses across its French business by £11m by cutting its exposure to North African holiday spots that have been hit by political unrest, instead promoting locations such as Greece.
However, Long said France was likely to reach break even in 2016 rather than next year because of the tough economic backdrop in the country.
Tui said holidaymakers were increasingly booking online, with group online sales increasing to 38 per cent of total sales compared with 34 per cent in the first half last year.