TUI in £30m blow from Africa crisis

TRAVEL group TUI said yesterday the unrest in Tunisia and Egypt could cost it up to £30m as the holiday destinations effectively became no-go zones.

The company, Europe’s largest travel operator, said that the bill from the Egypt crisis was likely to be £25m with Tunisia denting its figures by £5m.

The warning came as it announced a pre-tax loss for the end of 2010 of £134m – smaller than the £166m it lost during the same period a year earlier.

Revenues were £2.7bn compared to £2.5bn.

The figures – covering October to December – showed that the Nordic countries and Canada had performed well, offsetting some of the weather chaos in the UK.

TUI said that overall bookings at the start of this year had been strong.

Chief executive Peter Long said: “The progress in the first quarter represents an encouraging start to 2011 and the forward booking position is good.

“We remain cautious, however, given the current economic and geopolitical uncertainty.”

German-owned TUI is planning £100m of cost savings a year over the next three years.

The group is aso planning to expand its online sales operation in a bid to give the business more impetus. TUI was badly hit in the economic downturn and ongoing costs linked to its creation in late 2007, from the merger of British travel group First Choice and the tourism activities of German travel giant TUI. Shares closed 1.6 per cent lower after it made its statement yesterday.

Many travel firms have been forced to cancel trips to Egypt amid violent protests against President Hosni Mubarak.