TUI Travel plc

Results for the First Quarter ended 31 December 2009

Press Release   •   Feb 09, 2010 16:30 GMT

Key financials:

First quarter ended 31 December 2009

£mQ1 10Q1 09ChangeRevenue2,5332,747-8%Underlying operating loss1(107)(35)-72m

1 Underlying operating loss excludes separately disclosed items, amortisation of business combination intangibles, acquisition related expenses and taxation of results of the Group’s joint ventures and associates

Summary

  • Loss increased in the first quarter primarily due to:
    • Planned capacity-led volume reductions in Q1, which resulted in organic revenue down 14%;
    • Tough comparative period, particularly for winter holidays, with our Q1 09
      departures over 75% booked at the time of Lehman Brothers’ demise; and
    • Continued competitive and yield pressure in Corsair.
  • Experiencing a significant improvement in profitability in Q2 and with seven weeks remaining we expect our result for the first half to be in line with expectations due to:
    • Improved trading trends, with significantly less product left to sell in our major
      source markets;
    • Reduced volume impact as winter capacity cuts were weighted towards Q1;
    • Our exit from scheduled flying operations in Germany; and
    • Completion of the strategic venture with Sunwing in Canada.
  • Recent trading demonstrates continued improvements in demand for holidays:
    • Winter 2009/10: Booking volumes and pricing have continued to strengthen for the remainder of the season;
    • Winter 2009/10: Booking volumes since our last update are trading ahead of the capacity left to sell in all source markets;
    • Summer 2010: We are pleased with trading for the summer season; since our last trading update, customer bookings in the Nordics and the UK are up 40% and 6% respectively; and
    • Summer 2010: Measured capacity increases in the UK and Nordics following demand strength, introduction of further differentiated content and an additional ship in Thomson Cruises.

Peter Long, Chief Executive of TUI Travel PLC, commented:

“Our flexible business model allowed us to manage the impact of the first full winter season since the height of the economic downturn by ensuring demand was in line with profitable supply. As anticipated, trading has been difficult, especially against a tough comparative period, but sustained improvements in demand over a number of months leave us more confident that the worst is behind us.

I expect positive momentum in each of the remaining quarters of 2010 as trading benefits from improved demand in all source markets, merger synergies are delivered, and the benefits of our strategic venture in Canada and our exit from scheduled flying in Germany are realised. For these reasons, I remain confident that we can meet our Board’s expectations for 2010.”

A conference call for analysts will take place today at 8.15am (GMT). The dial-in arrangements for the call are as follows:

Telephone:+44 (0) 1452 555 566Participant Code:55550611

A presentation to accompany the conference call will be made available at 8.00 am (GMT) via our corporate website:

http://www.tuitravelplc.com

A recording of the conference call will be available on:

Telephone:+44 (0) 1452 550 000Participant Code:55550611#

 

Enquiries:

TUI Travel PLC Paul Bowtell, Chief Financial OfficerTel: 01293 645 713Andy Jones, Director of Finance & Investor RelationsTel: 01293 645 795Paul Rushton, Head of Investor RelationsTel: 01293 645 795Lesley Allan, Corporate Communications DirectorTel: 01293 645 774  Hudson Sandler Jessica Rouleau / Kate HoughTel: 020 7796 4133 Results for the First Quarter ended 31 December 2009 (96KB PDF)