TUI is buoyed as UK travel remains solid

TUI Travel yesterday gave a confident outlook as weaknesses in its French business were offset by resilient bookings in the UK and a strong performance in the Nordic region.

TUI said that sales in its northern region – which include the UK business – were up by 57 per cent year-on-year to give an underlying profit of £88m for the quarter.

The firm said that the later timing of Easter and the fact that the volcanic ash cloud had not returned over Iceland had helped its figures, which cover the three months to 30 June.

Chief executive Peter Long said the business was on the front foot despite the tough consumer climate, which has triggered three profit warnings at rival Thomas Cook and claimed the scalp of its chief executive Manny Fontenla-Novoa.

However, as with Thomas Cook, sales were badly hit in the French market. Political unrest in the likes of Egypt and Tunisia triggered a £29m loss in the region.

TUI said it would merge all its French brands into one, with possible job losses as a result.

Long said: “We are pleased with the performance of the business. We have problems in France but the UK market is holding up well.

“I think with all the bad news people are having at the moment they may be even more likely to go on holiday. We are certainly seeing strong bookings.”

He said that UK customers were snapping up 11-day all inclusive breaks because they were cheaper than fortnight trips but still offered a significant “unwinding” period abroad.

These stays were up 24 per cent compared with the same period last year. Meanwhile winter holiday prices will be hiked up by between two and three per cent to reflect rising costs, particularly of petrol.