The £457m loss compares with a £366m loss a year ago, as the challenging economic environment, severe flooding in Thailand last year and North African unrest left people reluctant to venture abroad.
And Tui’s French business is costing the company. Over the six months, France reported an underlying operating loss of £61m, compared to £39m last year, driven by a weaker performance from both the French tour operators and the airline Corsair. ‘In France we continue to encounter a later bookings curve in challenging trading conditions,’ the company said.
But despite the widening losses, Tui, which owns Thomson and First Choice, isn’t looking in bad shape. The company said winter bookings outperformed the market, driven by strong demand in the UK, and bookings for this summer are well ahead of last year and up 3%. Profit margins are also higher.
‘The lates market contributed to strong UK trading during the second quarter as a result of robust margins. We were pleased with our price performance this winter, with average selling prices up 4%,’ chief executive Peter Long said. Travel companies usually make a loss in the first half of the year, but this is balanced out after the summer holidays are taken into account.
Tui is also hoping to benefit from the difficulties facing its rival Thomas Cook, which issued a string of profit warnings last year. Over the weekend, the 170-year-old UK travel company secured a three-year funding lifeline worth £1.4bn, but its struggles may still leave potential holidaymakers wary. Thomas Cook reported a 2% decline in summer bookings in March, and a 1% fall the previous month.