Brighter outlook for travel giants Thomas Cook

Published on Saturday 6 February 2010 15:44

TRAVEL giants Thomas Cook and Thomson Holidays owner TUI Travel go head to head in trading updates this week with the focus on the all-important summer season.

TUI – first up on Tuesday – said in December that demand for summer holidays this year had held up despite "exceptional fuel and currency driven cost inflation" as well as lingering economic gloom.

The firm, which owns First Choice, was also pleased with early booking patterns for summer, as the hard-pressed cling to holiday plans.

Thomas Cook, which posts first quarter results on Thursday, also said in November that summer bookings were on track and cheered the City with better than expected profits of 308 million.

Chief executive Manny Fontenla-Novoa said the results were "particularly pleasing" against the backdrop of recession and the swine flu outbreak, which cost it an estimated 8m in the UK.

The firm, which carries around six million UK holidaymakers a year, expects "continued strong growth" from destinations such as Turkey and Egypt as customers shun euro-zone countries due to the weak pound.

Numis analyst Wyn Ellis said: "We believe that demand has held up well and that the summer vacation remains a priority consumer purchase. Consequently, we expect a positive update."

Telecoms giant BT has already boosted market hopes ahead of its third quarter results on Thursday, having recently upped full-year revenues guidance.

BT said in November that costs were down by more than 900m after a jobs cull.

The group is in the process of cutting 15,000 jobs in the period to 31 March after trading difficulties at its global IT services division.

The operational problems left BT more than 100m in the red last year, but chief executive Ian Livingston said there were some encouraging signs as he improved his guidance for group revenues.

BT said annual underlying revenues were likely to be down by 3-4 per cent.

Analysts are expecting third quarter pre-tax profits to have improved to 188m against 113m a year earlier

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