TT. Tui Travel

TUI Travel PLC (TT.LN) Thursday said its ability to shift holiday capacity from region to region had helped it mitigate the impact of civil and political unrest in Tunisia and Egypt.

"Following the political events in Egypt and Tunisia our experience has been that customers continue to want to go on holiday with us, albeit to alternative destinations," TUI Travel Chief Executive Peter Long said. "The flexibility we have in our business model has allowed us to actively re-shape our programs across all our source markets to satisfy this demand and we have moved significant capacity to a number of other destinations including Spain, Greece and Turkey."

All governments, expect Russia, within the source markets it operates in have now lifted their advice not to travel to Egypt or Tunisia.

Long said the company was working with suppliers in Egypt and Tunisia to reduce prices and encourage demand in the region, but capacity now was lower. The impact for TUI Travel in the second quarter is expected to be in line with previous guidance of between GBP25 million and GBP30 million.

Summer bookings were ahead of last year, the company said, with exception of the U.K. and France, the two countries affected most by the troubles in North Africa.

The timing of Easter, which falls later in 2011, will shift about GBP20 million of profit to the fiscal third quarter from the second quarter.

The company said it was seeing strong demand for holidays that only TUI Travel offers, which tend to generate higher margins.

It has a few holidays left to sell for the winter period and, with prices remaining firm, it is confident that it will achieve required load factors and pricing levels for the remainder of the season.

TUI Travel's shares closed Wednesday at 229 pence. They have shed 24% in value in the past 12 months.

-By Kaveri Niththyananthan, Dow Jones Newswires; 4420 7842 9299; kaveri.niththyananthan@dowjones.com

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