TUI reported a 39 per cent rise in third-quarter profits to £65.4m and said there was no evidence that consumers were trading down or curtailing their holiday plans because of current economic conditions.
Chief executive Peter Long said it made sense in the current climate to reduce capacity while maintaining `significant flexibility' to adjust supply.
The UK business is planning to reduce capacity by 21 per cent for this winter and by 15 per cent next summer, with rising fuel costs offset by operating six fewer aircraft in winter and 11 fewer next summer.
The company said strong consumer demand and the elimination of loss-making capacity meant there were `significantly fewer' holidays left to sell in the late market this year. As a result the average selling price is around 15 per cent higher than a year earlier.
TUI said trading, especially in the UK, continued to be `buoyant' despite economic conditions. UK sales rose five per cent for summer 2008, with the average selling price ahead by 13 per cent.
Mr Long added: "Our customers continue to place enormous value on their holidays, and we are seeing no evidence to suggest that demand is slowing for any of our seasons on sale."
The company has noted a `slight shift' from long-haul to medium-haul destinations, with locations such as Egypt, Turkey and Greece seeing growth significantly ahead of the previous year.
TUI said the popularity of Greece was largely due to the strong performance of its Thomson Sensatori resort in Crete, which is exclusively available to TUI customers.
Luton-based TUI was created through the merger of First Choice and the travel arm of German firm TUI last summer.
Around 37 per cent of its profits are generated from the UK, with the bulk of the rest coming from continental Europe.
Tweet
