Travel firms TUI Travel and Thomas Cook have both announced that they have been able to slim losses for the first-quarter by pushing up the cost of package holidays. Although bookings for summer holidays at Thomas Cook are down by 5 per cent, the travel agent said that in the last three months of 2012 it had managed to narrow its operating loss to £70 million, a contraction of 24 per cent.
Thomas Cook has driven up the price of its winter holidays by an average of 12 per cent and its summer holidays by 3 per cent and avoided having to offer discounts by reducing the number of package deals on offer.
TUI Travel, operator of First Choice and Thomson, has reported growth in demand even though it too has pushed up prices. Peter Long, the group’s chief executive, said demand for winter and summer holidays was being driven by last year’s wash-out. People seem to be making sure that they are not disappointed this year by booking early, he added.
Thomas Cook has been forced to make a number of profits warnings but insists that turnaround plans are on track. Although fuel prices continue to rise, the travel company has managed to improve underlying margins and reduce overheads through shop closures.
TUI could face problems in the summer when it is due to start running Boeing Dreamliners. The planes are currently grounded because of technical problems, but TUI insists it has contingency plans in place should the problems persist.