TUI Travel reports £367m first-half loses as Thomas Cook seals financing deal
TUI Travel, the tour operator behind the Thomson and First Choice brands, has reported £367m pre-tax losses for the first six months of the year, while rival Thomas Cook's £1.4bn financing deal has been approved by its banks.
TUI Travel reported pre-tax losses of £367m for the six months to 31 March, showing little change from its reported £364m pre-tax losses for the same period last year.
But TUI said a strong performance was delivered by the UK, with a £48m improvement in first-half underlying operating loss.
TUI, like its rivals, has been hit by a drop in holidays to North Africa, where recent unrest has affected demand.
The company's revenues increased by 5% – the same rate as last year – and climbed to £5.4bn. The group pinpointed the UK as having shown a "strong" performance.
The operator said its UK results were helped by increased sales of "differentiated and exclusive content", which includes the repositioning of both the Thomson and First Choice brands last year.
The group said 47% of its winter holidays were now booked online.
Peter Long, chief executive of TUI Travel, said: "We are pleased with overall performance for the first half. The UK delivered a strong winter performance, which attests to our focus on differentiated and exclusive product, and being online driven – key elements of our modern mainstream strategy."
TUI Travel's steady financial performance comes as rival operator Thomas Cook, which has suffered severe financial turbulence over the past year, confirmed its new financing package with its banks for £1.4bn.
The troubled group revealed it was in further discussions with its banks to secure a £1.2bn deal in April, to extend its current financing agreement by two years and allow it to continue operating in the travel market.
Thomas Cook's group chief executive Sam Weihangen said on Saturday (5 May) that the deal showed an "ongoing support" from the its lenders.
He said: "We continue to make good progress in strengthening the group's financial position, and our disposal plans, including an aircraft sale and leaseback, are proceeding well.
"These actions are an important step in the journey to strengthen confidence and ensure that the Thomas Cook Group will continue to provide customers with wonderful travel experiences for years to come."
Follow Loulla-Mae Eleftheriou-Smith on Twitter @LoullaMae_ES
This article was first published on marketingmagazine.co.uk
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