TUI Travel PLC reported a 53% increase in operating income in its first year as a merged company.
Operating income was 398 million British pounds ($596 million based on current conversion rates) for the fiscal year, up from 260.5 million pounds ($390 million) last year.
"We are delighted that in our first year as a merged company, we have achieved significantly improved profitability across the business," TUI Travel CEO Peter Long said in a statement. "Our customers continue to regard their main holiday as an essential, not a luxury, which they are reluctant to forgo."
TUI's tourism division and First Choice Holidays merged on Sept. 3, 2007 to create TUI Travel PLC. Thus, the 2007 fiscal year period includes the results of First Choice only from Sept. 3, 2007.
TUI Travel reported a 9% increase in revenue for the fiscal year ended Sept. 30, to about $20.9 billion.
Over the course of the fiscal year, TUI Travel acquired 16 niche businesses for a combined $162 million.
Long said the company is now planning on reducing costs by about $261 million by achieving synergies. That figure is about $37 million more than TUI Travel had previously estimated it would cut.
"I believe that the actions we are taking to manage supply and accelerate the synergy benefits puts us in a strong position to manage the current economic environment and continue to meet our expectations for 2009," Long said.
In line with a mid-November trading update, TUI Travel said it still plans to reduce summer ’09 capacity by 16%.