TUI Travel sales up but losses widen

The largest tourism company in Europe, TUI Travel, has released figures on its financial performance over the last nine months and reported that losses widened due to a write-down of goodwill for TUIfly and to an increase in its administrative costs.

The company’s net loss rose to 516.2 million pounds for the period ending 30 June, from a loss of 335.4 million pounds for the same period last year, the company reported in a prepared statement. Sales increased by nine percent, up to 8.78 billion pounds and continued the gain seen over the last three quarters. The write-down for TUIfly amounted to 111.7 million pounds.

TUI Travel will be combining its main brands – First Choice and Thomson – after have been formed by a merger of the brands in September of 2007. The merger came approximately two-and-one-half months after competitor Thomas Cook was formed in a similar manner. The Thomas Cook group has reported an increase in nine-month sales also, demonstrating that Europeans are still spending money on travel during this gloomy economic period.

“The statement paints a very encouraging picture,” said Wyn Ellis, a Numis Securities analyst. He added that TUI stock “remains attractive at current levels.”

TUI Travel’s administrative costs rose by 42 percent, up to 915 million pounds, according to the company’s report, which was in line with its forecast. The travel company is in the midst of talks with Lufthansa concerning the possibility of merging TUIfly with Lufthansa’s Germanwings division.

www.tui-group.com