TUI buoyed by strong demand
Thomson owner TUI Travel described trading in the UK as “buoyant” today, but said it still planned to cut capacity by 15% for next summer.
TUI reported a 39% rise in third quarter profits to £65.4m (€82m) and said there was no evidence that consumers were trading down or curtailing their holiday plans because of current economic conditions.
Chief executive Peter Long said it made sense in the current climate to reduce capacity while maintaining “significant flexibility” to adjust supply.
The UK business is planning to reduce capacity by 21% for this winter and by 15% in summer 2009, with rising fuel costs offset by operating six fewer aircraft in the winter and 11 fewer planes next summer.
The company said strong consumer demand and the elimination of loss-making capacity meant there were “significantly fewer” holidays left to sell in the lates market this year. As a result the average selling price for the season is around 15% higher than a year earlier.
