First Choice cuts summer capacity

Ally · 03-23-2006, 03:45 AM

23rd March 2006

Quote:

First Choice has cut summer capacity by 5% after revealing that mainstream package bookings are down by the same level.

The cuts are focused on the May and June low season, the group said in a trading update. First Choice said a number of "negative external factors" including the outbreak of bird flu in Turkey hit demand during the January peak booking period.

Revenues for summer '06 are 3% higher than last year "reflecting stronger pricing and the remixing of the business," a statement said. "Margins are in line with our expectations and ahead of last year, having absorbed incremental fuel costs."

First Choice also disclosed that 68% of bookings are now coming via in-house channels, a rise of eight percentage points year-on-year.

A breakdown of the figures for summer shows shorthaul mainstream holiday passengers booked down by 7%, medium haul down 11% but long haul up 23%.

Capacity has also been taken out of the group's specialist holidays sector, which has seen summer bookings down 14% and revenues down by 11%.

The activity holidays sector has seen revenues ahead by 8% for summer and 12% for winter 2005-06.

Volumes in the online destination services sector were described as "strong" for both winter and summer, with B2C accommodation provider Hotelopia winning a contract to proviude online accommodation for Spanair from the summer.

Chairman Sir Michael Hodgkinson said: "We remain confident that our business model will allow us to continue to make progress this year towards out 5% operating margin target and are satisfied with the progress made so far in 2005-06.

"The introduction of our new long haul service in the mainstream holidays sector is proving very popular with our customers and we have a strong pipeline of acquisition opportunities in niche growth segments of the travel market that we are activety pursuing."
(TravelMole)