TUI trebles loss in Q1, shares flat along with FTSE 100

Compared with the previous year TUI’s revenue was down eight per cent to £2.5 billion, while underlying operating loss jumped from a loss of £35 million to a loss of £107 million.

The company said the drop was in part due to a planned reduction in volume in the first quarter, combined with a tough comparative period.

Despite the drop TUI said that it was seeing a “significant improvement in profitability” in the second quarter and that it expected first half results to be in line with expectations.

The company said that there were signs of an improvement in the demand for holidays with bookings for winter 2009/10 doing well. Bookings for summer have increased six per cent in Britain and are up 40 per cent in TUI’s Nordic operations.

Peter Long, Chief Executive of TUI Travel, said, “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.”

The news had little impact on TUI’s share price, which at 11:30 was fluctuating up and down by little more than a percentage point either way at around 258.00 pence per share. This mirrored the FTSE 100 itself which at the same time was up only 0.29 per cent.