CORRECT: TUI Travel Well Placed To Meet Fiscal Year Expectations
11 Maggio 2009 - 11:10AM
Dow Jones News
Europe's biggest travel company TUI Travel PLC (TT.LN) Monday
said it's well placed to meet the board's expectations for the full
year after robust trading in the past eight weeks.
TUI Travel said it was able to maintain strong pricing after
cutting capacity. It met its targets for load factor - a measure of
the number of available holidays that are sold - but witnessed
slight weakness in March due to the later timing of Easter this
year.
Average selling prices in the U.K. have remained 10% above last
year, whilst customer volumes are in line with capacity reductions.
As a result load factor is now 58%, flat on last year.
The travel operator said U.K. bookings in the last 8 weeks are
down 11% on the year while cumulative bookings - or those since the
start of the financial year on Oct. 1 - fell 17%.
The number of customers booking long-haul destinations was down
25% from Jan 1 to May 3, but - despite an 18% drop in sales -
average selling prices increased 10%. For medium-haul trips, demand
fell 14% but average selling prices were up 11%.
Demand for long haul has been particularly strong in recent
weeks, TUI Travel said, despite the outbreak of swine flu. That
caused a switch in demand from Mexico, where the outbreak
originated, to other medium- and long-haul destinations, such as
Jamaica, which was up 30% in the last two weeks. Demand to Egypt
was up 23%, whilst demand for the Dominican Republic rose 19%.
The company said of its 2,500 customers who were in Mexico at
the time of the outbreak, only about 10% accepted the offer of
early flights home.
The trend towards non-euro destinations continues, especially to
Egypt and Turkey, as customers seek to benefit from exchange
rates.
The company added that discounts by third party distributors in
Germany helped it achieve higher margins per customer despite lower
average selling prices. However, in the last eight weeks, bookings
were down 12%, whilst cumulative bookings since Oct. 1 were down
10%, compared to the same period a year earlier.
The winter 2008/09 season closed in line with the company's
views.
At 0749 GMT, TUI Travel shares were down 2.2%, or 6 pence at 262
pence.
Company Web site: www.tuitravelplc.com
-By Kaveri Niththyananthan, Dow Jones Newswires; 4420 7842 9299;
kaveri.niththyananthan@dowjones.com
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