UK travel operators post strong updates after XL collapse
Tour operators TUI Travel and Thomas Cook posted strong trading updates today as the pair showed signs of benefiting from the collapse of rival XL.
Thomas Cook described early indications for next summer as “encouraging” and said the reduction in capacity as a result of fewer operators in the sector had improved the company’s outlook.
Thomson owner TUI Travel told a similar story and said it had taken steps to eliminate unprofitable capacity.
Shares in Thomas Cook opened 4% higher, while TUI shares were unchanged.
Thomas Cook said it was on track to meet expectations for the current financial year, which ends tomorrow. It said it had 24% fewer holidays to sell than this time last year, while average selling prices were 15% ahead over the last four weeks compared with a year earlier.
Trading for the winter season has also been in line with expectations, with business “particularly strong” in the UK.
It said flexibility in capacity, its cost base and fuel hedging meant it would be able to adapt to changes in demand for the summer 2009 season.
Thomas Cook chief executive Manny Fontenla-Novoa said: “Package holidays are proving resilient and the strong position we have built in medium haul is proving particularly beneficial in this economic environment.”
