p14 pink nov28 26/11/08 20:32 Page 14
City & finance
Keep up to date with the travel industry’s financial news and results at ttglive.com
Oil price fall ‘will
Shares reveal
stimulate revival’
City’s unease
SHARE prices for the FTSE 100-listed Tui Travel
and Thomas Cook reflect a gloomy outlook for
the travel industry as a whole in the City.
FALLING oil prices and fuel surcharges will help September the number of UK residents travel- As TTG went to press, Tui Travel shares hit
the travel sector survive the downturn, accord- ling abroad remained relatively flat at 69 million. 194.5 pence, down from 240p at the start of
ing to analysts at Barclays Commercial Bank. Visits to Europe remained broadly the same at June, while Thomas Cook had regained some
Tim Helliwell, Barclays national head of hotels, 55 million, while journeys to other parts of the value lost last month, trading at 152.6p, well
said the combination of falling fuel prices, inter- world rose by 2% to 10 million. below its 248.7p value in June.
est rates and inflation would bolster consumer Trips to North America experienced a minor City analysts have expressed doubts about
confidence. decline of 1% to 4.7 million. recent upbeat assessments by Tui and Cook,
He was commenting on the latest statistics Another positive trend for the industry was an fearing that planned capacity cuts will not shield
from the Office for National Statistics, which increase in UK residents visiting eastern Europe, them from worsening economic conditions.
reported a fall in traveller numbers into and out encouraged by relatively attractive prices, The total number of package trips available is
of the UK for the three months ending Septem- particularly to nations that have yet to adopt the expected to drop by 20% in 2009, according to
ber compared with the same period a year ago. euro, according to Helliwell. Dresdner Kleinwort analysts.
Visits by UK residents abroad fell by 5% to “This shows there is still a healthy appetite for “We fear that neither further capacity cuts or
17 million, while visits to the UK by overseas bargain holidays,” he said. comments from management will help,” it said
residents declined 3% to seven million. “The trend is set to continue over the next 12 in a report, which described Cook’s share price
However, over the 12-month period to months, along with the popularity of last-minute as “fundamentally cheap”.
deals. Tui Travel will release its year-end results on
“Should oil prices remain low, and interest November 27.
UK tourism July-September 2008 rates and inflation continue to fall, this will Dresdner forecasts it will hit previous profit
certainly offer some compensation to the expectations of £370m, and that Tui AG will make
Visits by UK residents abroad down 5% industry as a whole, and regain some of the a bid for the company’s outstanding shares. It
Visits to UK by overseas travellers down 3% consumer confidence lost in the year to date.” currently owns 51% of the company.
Source: ONS Oil prices had fallen to $55 per barrel as TTG However, Dresdner warned investors to keep an
went to press, down from a summer high of $147. eye on Tui Travel’s currency and fuel exposures.
Airline carryings fall – but less sharply
EUROPEAN airlines are facing the worst down- which account for 70% of passenger-kilometres,
turn in 25 years despite an improvement in the saw falls of 1.1%, 1.1% and 0.8% respectively.
rate of decline in passenger numbers in October. The downward trend was compounded by a
The Association of European Airlines’ (AEA) strong decrease – 12.4% – in domestic traffic.
latest passenger figures, due out this week, were By comparison, October figures are expected
expected to show slowing decline in October. to show a decline of less than 1% in overall traffic.
In September, air traffic fell for the first time However, the AEA said this week it was
since the early 1980s, a decrease attributed awaiting passenger numbers from one of its
mainly to economic factors. biggest airline members.
The AEA, which represents 35 carriers, “At this point, we don’t think the situation has
including British Airways, Lufthansa and Air worsened since September, but it’s too early to
France-KLM, reported a 1.1% drop in passenger tell,” said a spokesman. “One airline’s results
traffic in September. could tip the scales.”
The three major operating regions – cross-
border Europe, North Atlantic and Far East – ■ ‘Airlines at risk of $20bn shortfall’: Air, p26
14 28.11.2008
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