TUI Travel says demand for holidays remains strong

TUI Travel, Europe's biggest travel firm, said on Thursday that demand for package holidays remains strong and it was confident of meeting its expectations for 2008 and 2009, despite slowing economies, Reuters reported.
The group, created last year from the tie-up of TUI AG's travel division and Britain's First Choice, reported a 39% increase in third-quarter underlying operating profit to 65.4 mln pounds.
Revenue rose by 9% to 3.6 bln pounds and the underlying operating margin was up 40 percentage points to 1.8%.
TUI Travel said it has significantly fewer holidays left to sell for summer 2008 compared with last year. UK sales were up 5% with average selling prices 13% higher.
The group said winter 2008/9 and summer 2009 have started positively with average selling prices in the UK up 8% and 12% respectively.
TUI Travel said it has already completed the actions necessary to deliver the majority of next year's targeted merger savings of 80 mln pounds and is confident of delivering at least 150 mln of synergy benefits in total.
The group and its rival, Thomas Cook, have been cutting capacity, leaving them with fewer holidays to sell and enabling them to avoid deep discounting on late bookings.
TUI Travel said it will make further reductions to capacity in summer 2009, particularly in the UK and Germany, with year-on-year capacity reductions of 15% and 6%.
The average forecasts for 2008 and 2009 pretax profit are 317 mln pounds and 403 mln pounds respectively, according to Reuters Estimates.