LONDON: TUI Travel, Europe's biggest tour operator, said on Thursday that business was in line with expectations, with strong winter demand in Britain, but the group continued to struggle in France.
"Overall trading remains in line with our expectations," the London-listed company said in a trading update, noting that British winter trading had exceeded its expectations.
Chief executive Peter Long added: "We are pleased with our winter performance, particularly in the UK, where our focus on differentiated product and online distribution is resulting in us out-performing the market."
TUI Travel said that summer 2012 volumes have improved across all its key markets since its last update in February, but admitted that it faced "challenging" conditions in France due to a variety of factors.
The group has been plagued by weak demand for North African destinations amid turmoil across the region.
"Since our last announcement we are pleased with our trading performance in all our key markets with the exception of France," TUI Travel said.
"In France, trading has been challenging due to the continued slow recovery of North Africa and the prevailing economic conditions," it added.
"The forthcoming presidential elections have also impacted volumes for the early part of the summer season, for which we are managing capacity accordingly."
Meanwhile, analysts said that TUI Travel was drawing strength from the plight of its struggling rival Thomas Cook.
"The outlook is cautious due to the obvious economic and political challenges, but given the plight of its key competitor, TUI should continue to outperform the market," noted analyst Donal O'Neill at Goodbody Stockbrokers.
Thomas Cook had revealed on Wednesday that its trading performance had steadied in recent weeks after a string of heavy losses for the firm, Europe's second-biggest holiday company.
The travel firm came close to collapse last November when dire trading forced it to request a vital credit line from banks.
Thomas Cook last month posted widening quarterly losses due to the weak global economy, restructuring charges, higher fuel costs and unrest in North Africa.
TUI Travel was created in late 2007 from the merger of British travel group First Choice and the tourism activities of German travel giant TUI.