German tourism giant TUI said Tuesday it sharply reduced first quarter losses and confirmed growth forecasts for the financial year 2016-17, although terrorism fears continued to weigh on business. TUI reported a loss of 117.5 million euros ($125 million) between October and December, an improvement of 36 percent compared with the last financial year.
The firm labelled it a "good start to the year" in what are usually difficult months for the tourism sector. London-listed TUI - born of a merger between Hanover-based TUI and British subsidiary TUI Travel in 2014 - increased revenue 2.3 percent to 3.3 billion euros compared with the same quarter in 2015-16.
Meanwhile, its underlying, or operating result improved by 25 percent to a loss of 60.3 million euros.
"TUI is economically healthy at its core and we are delivering on our promises," said chief executive Fritz Joussen, confirming the group's target to increase operating profit by "at least 10 percent" over the full year.
Since the 2014 merger, TUI has focused on its package holiday business and is selling off business units that don't match the new direction.
On Monday, the group said it would sell its Travelopia specialist travel business to US investment fund KKR for 381 million euros.
The cash will be ploughed into expanding TUI's hotels and cruises business, with a new liner planned for launch in each of 2017, 2018 and 2019.
By offering flights, hotels, and trips to a broad customer base, the group hopes to adapt more easily when events sap tourism to one or another region.
TUI noted lower demand for trips to Turkey and North Africa - hit by a military coup attempt and terrorist attacks last year - among some customers in its first quarter.
The group also noted a 22-million-euro loss from a higher-than-usual number of sick days in October leading to cancelled flights at its TUI Fly subsidiary, around the time when TUI announced it would place the airline into a joint venture with Etihad.
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