Airtours profits shine

August 8, 2001 Posted: 0855 GMT

LONDON (CNN) -- Airtours, the UK's largest tourism company, reported a surge in third-quarter earnings on Wednesday as summer bookings rose.

The company said pretax profit in the quarter ended June 30 increased to £26.6 million ($37.8 million) from a restated profit of £2.1 million in the same period a year ago.

Turnover rose 25 percent to £1.44 billion as the company saw a 9 percent rise in advance group bookings for winter 2001 holidays. Bookings for summer 2002 were up 8 percent.

Airtours, along with other conventional travel operators, has seen profits hit by competition from online rivals such as lastminute.com and easyJet. In response it has invested in its own e-commerce business, mytravel, to defend its market share.

The mytravel websites for the UK and Scandinavia are currently undergoing testing and will be launched later this year, the company said. E-commerce costs in the third quarter amounted to £3.4 million.

"With strong forward bookings in all our markets for the rest of the summer and for the future season on sale, the group is well placed to deliver sustainable growth,"  said Chairman David Crossland.

Airtours also said there had been a turnaround in its U.S. charter business in the third quarter, when £5 million was added to profits.

Airtours shares rose 4.2 percent to 246 pence in London trading after the results were announced.

Shares in Airtours plunged 8 percent on May 21 when Carnival (CCL: Research, Estimates), the world's largest cruise operator, announced it was selling its 25 percent stake in the UK company.

The move was prompted by a spate of acquisitions by Airtours. The U.K. company's purchase of U.S. cruise retailer Travel Services International strained its relationship with Carnival.

Airtours said operating profit at TSI in the U.S. rose to £15.3 million from a restated £9.8 million "despite the softening of demand as a result of the uncertainty in the U.S. economy."

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