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Europe's top tour operator sees firm profits, sidesteps Egypt TUI Travel says its diverse customer base and wide range of destinations are allowing it to redirect tourists from trouble spots and sustain its trade
TUI Travel , Europe's biggest tour operator, said it was on track to meet expectations for the full year, with its broader mix of destinations allowing it to offer alternatives to holidaymakers avoiding unrest in Egypt and Tunisia. The group, majority owned by German group TUI AG , reported a 57 per cent rise in operating profit to 88 million pounds (US$143 million) in its third quarter to end June, benefiting from the late timing of Easter and better-than-expected Nordic and British trade. "This performance is particularly pleasing in the UK against a backdrop of weak consumer sentiment," Chief Executive Peter Long said in a statement on Wednesday. Rival Thomas Cook has issued three profit warnings in the past year as British trading slumped dramatically, leading to the departure of veteran chief executive Manny Fontenla-Novoa last week. Long attributed TUI Travel's outperformance to the strength of its Thomson and First Choice brands and the broader diversity of the group's customer base which has a high proportion of couples, especially 'empty nesters' whose children have left home and who have disposable income. Long also said Thomson and First Choice's range of holidays allowed it to refocus when popular destinations like Egypt and Tunisia were hit by unrest. "We are very well represented in the western Mediterranean and we've never had an over-dependence on one particular part of the market," he said. Overall revenue rose by 13 per cent to 3.8 billion pounds while underlying operating margin increased by 0.6 percentage points to 2.3 per cent. TUI Travel said the amount of holidays it has left to sell was in line with last year and the group was confident of meeting expectations for the full year. The average forecast for full year EBIT (earnings before interest and tax) stands at 468 million, according to a Thomson Reuters poll.
