TT. Tui Travel

TUI Travel PLC (TT.LN), Europe's largest travel group by sales, Tuesday reported its net loss in fiscal 2009 narrowed as it adjusted capacity to meet demand while it continued to benefit from merger synergies, and it gave an upbeat assessment of its prospects for the year ahead.

The company, whose brands include Thomson and First Choice, said it a statement that it had taken a cautious approach to capacity planning to ensure that supply was in line with demand and that it was pleased with its current booking position.

"For Winter 2009/10, we have seen stronger bookings over the course of recent weeks, which reflects a similar pattern to our experience in Winter 2008/09, and this gives us confidence that we will achieve required load factors," it said.

Demand for summer holidays remained strong. "We are currently planning for capacity to be approximately flat in most source markets for the Summer 2010 season, although we retain flexibility to adjust supply as demand develops," the company said.

"In addition, our businesses are benefiting from significantly lower cost pressures than Summer 2009 which means that, unlike last year, we do not have to pass on substantial price increases to our customers."

The company said in the fiscal year ended Sept. 30 its net loss narrowed to GBP25 million from a net loss of GBP270.7 million a year ago. Revenue was almost flat at GBP13.86 billion compared with GBP13.93 billion.

Its pretax profit rose 15% to GBP366 million from GBP319 million a year ago.

TUI Travel was created in 2007 through the merger of Germany-based TUI AG's (TUI1.XE) travel division and First Choice of the U.K. It serves more than 30 million customers a year in more than 25 markets.

Rival Thomas Cook Group PLC (TCG.LN) Monday reported net profit in fiscal 2009 rose 46% to GBP15.8 million from a pro forma GBP10.8 million a year earlier, driven by an increase in revenue, lower finance costs and summer holiday bookings.

TUI Travel's shares Monday closed at 246 pence. They have gained about 10% in value since the start of 2009, lagging the performance of the benchmark FTSE 100 index, which has climbed 17% over the same period, due to concerns about consumer spending amid the widespread economic downturn.

-By Jonathan Buck, Dow Jones Newswires; +44 (0)207 842 8237; jonathan.buck@dowjones.com

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