TUI Travel optimistic in spite of low demand

Europe’s biggest holiday operator TUI Travel will end the year with a narrow loss after cutting flights in Germany and the UK.

From September 2009, the company’s net loss decreased from last year’s £271 million to £25 million, announced by the England-based company in a statement earlier. TUI had also cut its orders for Boeing aircrafts, from the original arrangement of 23 down to 13, and had reduced the number of tour packages it offers to avoid selling holiday plans at reduced prices in the midst of an unprecedented decline on travel demand.

Peter Long, Chief Executive Officer of TUI, said that there is a surge in demand for cold season bookings. He informed that winter season bookings made with TUI in the last month only fell 4 per cent, an improvement compared to the 16 per cent drop for the entire season. Meanwhile, bookings made from Scandinavia in the last month grew 14 per cent compared to the 15 per cent collective decline.

The merger of Thomson and First Choice brands in September 2007 saved TUI £120 million and expects to save an additional of £60 million next year.

TUI’s market value is now at £2.7 billion, boosted by a 4.2 per cent gain this year. However, the company’s current trading value plunged 2.6 pence to 243.5 pence. TUI will pay 7.7 pence per share.

At year-end, TUI’s acquired net debt will be at £338 million. The travel company is certain to meet forecasts and anticipates a more stable position in the market for the coming year.