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TUI Travel is continuing to focus on managing its capacity in anticipation of a weaker earlier booking environment in the UK.

Published: 28 Nov 2008

TUI Travel is continuing to focus on managing its capacity in anticipation of a weaker earlier booking environment in the UK.

"Accordingly, we have reduced capacity by 16 percent to ensure that we achieve strong average selling prices, meet load factor targets and consequently achieve our margin targets. To date volumes have been 17 percent lower but average selling prices have remained strong and are up 10 percent versus prior year, which is substantially greater than the expected cost inflation (of circa 6 percent) in this season. The total programme load factor is flat versus prior year at 19 percent but as a result of the capacity reductions we have implemented there is already 14 percent less stock left to sell for the season," stated the company.

The group shared that UK and Ireland delivered a £76.5m improvement in underlying profits to £132.9m in 2008

(2007: £56.4m). This was driven by an improvement in underlying margins, primarily due to tight capacity control, including the elimination of loss making routes, and the delivery of integration synergies.