TT. Tui Travel

U.K.-based travel operator TUI Travel PLC (TT.LN) Wednesday said demand for leisure holidays was continuing to improve strongly and it's well positioned to meet the board's expectations for the current fiscal year ending Sep. 30.

Europe's biggest travel operator by market capitalization had said in early February that bookings were improving, and Wednesday said they had continued to improve since then. Cumulative bookings in the U.K., its biggest market are up 13% in the six weeks to Mar. 14, and have risen 23% in the Nordics.

TUI Travel, whose brands include Thomson, First Choice and Airtours, said it had sold almost all the available holidays for this winter, and had experienced strong prices for late bookings because few holidays remained. It added that it had achieved planned load factors.

For the summer, trading remains strong, with improvements in cumulative booking volumes in most source markets.

In early February, the company had said it expected profitability to improve each quarter this year due to improving demand, its exit from scheduled flying in Germany, benefits from its venture in Canada and thanks to further synergies from the merger that created the company.

It reiterated that it expects to make "significant progress" in the second quarter for these reasons, and is well positioned to meet the board's expectations for the fiscal year.

The company's shares closed at 304 pence Tuesday, and are up 19% in the year to date on hopes for an improvement in the travel market.

Like rival Thomas Cook Group PLC (TCG.LN), TUI Travel was hit hard by the economic downturn, seeing revenues decline as it cut the number of holidays on offer in response to the fall in demand. The reduction in capacity helped the companies protect their prices and margins.

-By Steve McGrath, Dow Jones Newswires; 44-20-7842-9284; steve.mcgrath@dowjones.com

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