Ticket price hikes boost TUI Travel

1st Dec 2009 07:04

Travel operator TUI saw profits rise in the year to September 30 despite flat revenues amid reduced demand in the tough economic climate as it managed to raise ticket prices and keep its planes full.Pre-tax profits for the year at TUI Travel, which was formed from the merger of First Choice Holidays and the tourism division of TUI AG, rose to £366m from £319m the previous year as revenues slipped slightly to £13.86m from £13.93m.'Despite the challenging economic environment we have delivered strong earnings growth, demonstrating the resilience of our business model and the effectiveness with which we have delivered merger synergies,' said chief executive Peter Long.'Our customers' behaviour has demonstrated that even against a backdrop of reduced consumer confidence, the main summer holiday is an essential expenditure.'The firm said booking volumes have improved in the UK in recent weeks. In the last four weeks, they are down 4% on the same period a year ago. Average selling prices are up 10%.In Germany, TUI reduced capacity by 9% to maintain load factor (a measure of how full planes are) and selling prices.Other Western European markets also saw a reduction in bookings though the trend has improved in recent weeks.The firm said it had seen a good level of bookings for this winter and that its performance over summer 2010 should benefit from continued demand and lower cost pressures, leaving it well-placed to meet expectations for the year to September 30.While TUI saw profits rise on flat revenues, yesterday, rival Thomas Cook posted flat profits on higher revenues. It reported an adjusted pre-tax profit of £308.2m, down slightly from £309.3m the previous year, as revenues climbed to £9.27bn from £8.75bn.