Tui Travel expects higher profit despite Egypt strife

TUI TRAVEL increased its full-year profit guidance yesterday and said the unrest in Egypt would not have a material financial impact on the group overall, despite hitting demand for winter holidays.

The FTSE 100 tour operator said that it expected its underlying operating profit for the year to September 30 would be at least 11% higher than the same period a year earlier. It had been forecasting 10% growth.

CE Peter Long said the summer holiday season had remained strong for the group even though unusually warm weather had tempted Europeans to stay at home rather than venture abroad. Tui had benefited from being not so reliant on last-minute bookings, which were particularly vulnerable to holiday makers deciding to stay put and enjoy the domestic sun.

Tui expects to lose business as a result of the turmoil in Egypt, whose interim leaders imposed a state of emergency in the wake of the military overthrow of Mohamed Mursi’s government in July.

Mr Long said Tui would not attempt to shift all its aircraft originally due to fly to Egypt to other routes, although some had been redeployed to the Canary Islands and Cape Verde. “An Egypt customer may not be a customer who wants to go to another destination.”

But the impact would be offset by cost savings and support from the Egyptian government, Mr Long said. “The overall impact will be broadly neutral.”

Tui shares rose 2% to 362p in London early yesterday.