TUI could lose £30m from unrest in Egypt

The tour operator Tui Travel has admitted that the political and civil unrest in Egypt and Tunisia could knock up to £30m off its second-quarter revenues. The setback in the two North African countries came as the group behind Thomson Holidays posted reduced losses for the previous three months.

Peter Long, the chief executive, said: "We are closely monitoring events in Egypt and Tunisia... Early indications are that customers are choosing to rebook to alternative destinations and we are taking action to remix our programmes in line with customer demand."

While Tui Travel is continuing to send UK holidaymakers to Egypt's Red Sea resorts, it has cancelled its trips to Egypt from countries such as Germany, France and the Netherlands. If the tour operator cannot operate further holidays to Egypt except from the UK, it will lose about £20m – from a mixture of cancellation and repatriation costs – for the three months to 31 March. It estimates that it will lose another £5m if the UK Government starts advising against travel to the Red Sea resorts.

Tui estimates it will take a £5m hit because of the cost of repatriating travellers from Tunisia and revenues lost as a result of holiday cancellations to the country. While Egypt accounts for about 6 per cent of sales across Tui Travel, Tunisia represents a much smaller amount.

For the previous three months to 31 December, Tui improved its pre-tax losses by 19 per cent to £134m.

In the UK, Tui said better trading had offset costs arising from events including the severe weather disruption in December and higher flying costs due to the UK fleet using more B757s this winter.

The tour operator's star performer was its Northern region, including the UK and the Nordic countries, but its western Europe business also reduced operating losses. Losses rose at its central Europe unit, largely due to a restructuring of its flying operations.

Mr Long said: "The progress in the first quarter represents an encouraging start to 2011 and the forward booking position is good." Total revenues rose 6 per cent to £2.69bn.