TUI has improved its operating loss by £15 million in the first half, despite a weak UK economy.
It reported underlying operating loss of £307 million, compared with £322 million last year.
The travel giant said with two thirds of its profits generated outside of the UK, it is benefiting from its geographical diversity.
It said excellent turnaround progress, especially in Canada, alongside stronger underlying trading, particularly in the Nordics and Corsair, had helped offset the impact of North Africa and the later timing of Easter.
The political unrest in North Africa cost it £29 million, higher than the £22 million reported yesterday by Thomas Cook.
Chief executive Peter Long said: “I am pleased to report an improved first half operating result, particularly given the significant headwinds from political events in Egypt and Tunisia, the weak UK economic environment and the shift of the
Easter peak period from Q2 to Q3 this year.
“This result demonstrates our continued success in turning around underperforming businesses and shows the strength of our differentiated products which have allowed us to outperform the market. Furthermore, our continued focus on cash flow has resulted in a good cash performance in the period.
“The flexibility of our business model has allowed us to react quickly to mitigate the impact of the events in North Africa in the upcoming summer season. We have re-shaped our programmes across all source markets to satisfy the shift in demand to alternative destinations, including Spain, Greece and Turkey.
“The first half performance and our current booking position for the summer season leave us well placed to deliver the Board’s expectations for the year. At this stage of the booking cycle, however, we remain cautious given the uncertain economic and geopolitical outlook”.
He told BBC news that more UK customers were choosing all-inclusive trips and 10 or 11-night holidays in the economic downturn.
The UK & Ireland businesses was impacted by two cruise ships being in extended dry dock during the first quarter, plus the later timing of Easter and events in Egypt and Tunisia.
The UK business reported an underlying operating loss of £173 million compared with £161 million this time last year.
TUI said this was partly offset by another £5 million of incremental synergies and £3 million further cost efficiencies in the first quarter.
By Bev Fearis