The FINANCIAL — TUI Travel PLC, Europe's largest holiday company, posted a profit for its fiscal third quarter, but warned that the economic downturn and fears about job losses will hit bookings in the winter holiday season, according to Wall Street Journal.
TUI Travel returned to the black with a net profit of £33 million ($54 million) from a net loss of £216 million a year earlier, when impairment charges and losses from the sale of aircraft in a leaseback transaction weighed on results.
Revenue for the quarter ended June 30 edged down 1.1% to £3.58 billion from £3.62 billion as the company cut capacity in the U.K. and Germany. However sterling's weakness boosted revenue from outside the U.K.; stripping out currency fluctuations, revenue was down 9%.
The company estimated that swine flu recued profit by £8 million as it had to refund forced cancellations and repatriate affected travelers. Results were also hit by weak demand in France for travel to Madagascar and the French West Indies amid civil unrest, newspaper reported.
According to Wall Street Journal average selling prices for summer holidays fell 3% in central Europe, 2% in Western Europe, and the company is facing a fierce price war with competitors in Switzerland, where there is excess capacity.
The timing of Easter, which fell in the third quarter this year and the second quarter last year, helped boost to results.
TUI, created in September 2007 through the merger of TUI AG's tourism assets with U.K. travel company First Choice Holidays, said it delivered an additional £21 million in synergies from the merger.
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