22 September 2011

TUI Travel PLC

("TUI Travel")

 TRADING UPDATE

Highlights

Peter Long, Chief Executive of TUI Travel PLC, commented

"We are pleased with our performance in the lates market for Summer 2011, and most of our programmes are now almost fully sold. We remain confident that the full year results will be in line with our expectations.

"Trading for Winter 2011/12 is satisfactory overall, but we are anticipating a slow recovery in trading to Egypt and Tunisia, and have managed our capacity accordingly. Our focus remains on differentiated product, maintaining margins, prudent capacity management, and delivering our turnaround and cost savings programme. The flexibility of our business model means that we are well placed to achieve this."

Current Trading

Summer 2011

The Summer 2011 programme, which runs until the end of October in our largest source markets, is now almost fully sold, with load factors in line with prior year. The season is trading in line with our expectations and we are pleased with the development in margins in all source markets since our last update, in particular in the UK and Germany.

¹ These statistics are up to 11 September 2011 and are shown on a constant currency basis
² These statistics relate to all customers whether risk or non-risk
³ These statistics include all risk capacity programmes

⁴ These statistics refer to online accommodation businesses only; Sales refer to total transaction value (TTV) and customers refers to roomnights

Winter 2011/12

For Winter 2011/12 it is relatively early in the booking cycle for most source markets, however we continue to be satisfied with trading and booked load factors are in line with our expectations.

¹ These statistics are up to 11 September 2011 and are shown on a constant currency basis
² These statistics relate to all customers whether risk or non-risk
³ These statistics include all risk capacity programmes

In the UK, as previously announced, we have reduced capacity as a result of a change in aircraft fleet mix, including moving aircraft within the Group to serve much higher demand in the Canadian and Nordic markets. This has resulted in a 7% capacity reduction most of which has come out of Egypt and Tunisia.  As a result of these capacity management measures UK load factor is broadly in line with prior year. Average selling price is up 6%, partly reflecting higher fuel and accommodation costs. Differentiated product sales are progressing well, with bookings up 7% versus prior year, and our percentage of sales made via online channels has also increased by three percentage points, to 37%.

In Canada, trading has been very strong, with bookings up significantly versus prior year. In the Nordic region capacity is currently up 7% as we continue to expand our presence in destinations where we were previously under-represented.

Bookings in Germany are down 3% and average selling price is up 3%, leaving revenues flat overall. This is driven by lower demand for North African destinations, where capacity has been reduced.

In France, where approximately 60% of their passengers historically travel to Egypt, Tunisia and Morocco, trading continues to be significantly affected by the unrest in these countries earlier in the year.  As a result, bookings are 7% lower than prior year.

The Netherlands and Belgium are trading well, with the former planning capacity increases to reflect significantly higher demand.

Summer 2012

The UK has gone on sale for Summer 2012. It is very early in the booking cycle, with 10% of holidays sold to date, which is broadly in line with prior year. Bookings are currently down 11%, partly reflecting a reduction in capacity, which we expect to be down 4%. Average selling prices are up 10% - this reflects fuel and accommodation cost inflation, as well as an increase in the proportion of differentiated products sold.

Margin performance is a key driver for the Group. We anticipate that in the UK, cost inflation will be just over 5% for Summer 2012 and our prices are designed to recover these input costs in this competitive market.

Cash Flow / Net Debt Performance

A good cash flow performance is anticipated in the full year, resulting in an anticipated reduction in net debt. As mentioned in our previous update, this is due principally to working capital management measures.

Preliminary Results

TUI Travel will announce its preliminary results for the year ended 30 September 2011 on 5 December 2011.

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