TUI Travel boosted by late bookings

Europe's biggest tour operator TUI Travel said it was confident its full year results would be in line with expectations following strong late demand for summer holidays.

TUI Travel, which operates the Thomson and First Choice chains, said the summer season had traded well with bookings up across most of its markets while margins for late bookings had been in line with its expectations.

"We are pleased with our performance in the lates market for summer 2011 and most of our programmes are now almost fully sold. We remain confident that the full year results will be in line with our expectations," chief executive Peter Long said.

The company, which is majority owned by German group TUI, said trading for winter 2011/12 had been satisfactory overall, but is anticipating a slow recovery in trading to Egypt and Tunisia, where unrest disrupted bookings.

TUI Travel's performance has held up despite challenging economic conditions helped by the broader diversity of its customer base which has a high proportion of couples, especially 'empty nesters' whose children have left home and who have disposable income.

"Our focus remains on differentiated product, maintaining margins, prudent capacity management and delivering our turnaround and cost savings programme," Long said.

In contrast, rival Thomas Cook has issued a string of profit warnings leading to the departure of veteran chief executive Manny Fontenla-Novoa.

Shares in TUI Travel closed on Wednesday at 154.9 pence, valuing the business at £1.7bn.

Market expectations for TUI Travel's full year pre-tax profit range between £326m and £367m, with the average forecast at 352 million