(RTTNews) – UK-based travel operator TUI Travel Plc (TT.L: News ), Thursday, in a trading update, said it is on track to meet its full-year expectations. The company said its winter bookings are satisfactory overall and booked load factors are in line with its expectations. Meanwhile, TUI shares are trading down more than 6 percent on the London Stock Exchange.
The company stated that summer 2011 has traded well since its last update and had increase in bookings in most source markets. According to the company, the summer 2011 programme, which runs until the end of October, is now almost fully sold, with load factors in line with prior year.
TUI also has experienced development in margins in all source markets, particularly in the UK and Germany.
The company said winter 2011/12 trading to date is satisfactory overall and booked load factors are in line with its expectations. It is very early in the booking cycle for Summer 2012, it noted.
In addition, TUI expects year-end net debt to improve compared to last year.
Peter Long, Chief Executive of the company said, “We remain confident that the full year results will be in line with our expectations. Trading for Winter 2011/12 is satisfactory overall, but we are anticipating a slow recovery in trading to Egypt and Tunisia, and have managed our capacity accordingly.”
As announced earlier, the company has reduced capacity in the UK, as a result of a change in aircraft fleet mix and to serve much higher demand in the Canadian and Nordic markets. This has resulted in a 7 percent capacity reduction most of which has come out of Egypt and Tunisia. As a result, UK load factor is broadly in line with prior year, TUI noted.
Average selling price increased 6 percent, partly reflecting higher fuel and accommodation costs.
The company said in Canada, trading has been very strong, and in the Nordic region, capacity is currently up 7 percent from last year. Bookings in Germany declined 3 percent, driven by lower demand for North African destinations, due to reduced capacity.
In France, bookings are 7 percent lower than last year, as trading continues to be significantly affected by unrest in Egypt, Tunisia and Morocco. However, the Netherlands and Belgium are trading well, with former planning capacity increases due to significantly higher demand.
For fiscal 2010, the company had earlier reported a wider loss, as it suffered from a difficult trading environment in the UK due to planned winter capacity reductions as well as the disruption caused by the volcanic ash cloud. Loss from continuing operations was 86 million pounds or 7.8 pence per share.
TUI said it will announce its preliminary results for fiscal 2011 on December 5.
TT.L is currently trading at 144.3 pence, down 10.6 pence or 6.84 percent, on a volume of 810 thousand shares on the LSE.
