February 12, 2014 / 7:11 AM / 3 years ago

UPDATE 1-TUI AG says more confident for Hapag-Lloyd cruises unit

2 Min Read

* Q1 turnover down 2.9 pct at 3.4 bln eur

* Q1 underlying EBITA loss flat at 140.6 mln

* CEO says turnaround started at Hapag-Lloyd Cruises

* Group confirms 2013/14 outlook

FRANKFURT, Feb 12 (Reuters) - German travel and tourism group TUI AG said it was more confident for its struggling Hapag-Lloyd cruises unit as it reported quarterly results on Wednesday.

The group, which owns 55 percent of Europe's largest tour operator TUI Travel, said its first quarter underlying operating loss was flat at 140.6 million euros ($192.3 million), while sales dropped 2.9 percent to 3.4 billion euros.

TUI AG also runs its own hotel and cruise operations and said the first-quarter loss at the cruises division, which comprises TUI Cruises and Hapag-Lloyd Cruises, widened to 16 million euros from 11 million euros a year earlier.

Chief Executive Friedrich Joussen is shifting the focus of Hapag-Lloyd Cruises to luxury and adventure cruises and plans to restrict the amount of berths on offer to increase rates and occupancy. In the first quarter, the average rate per passenger fell to 368 euros from 373 euros and occupancy dropped 7 percentage points to 60.8 percent.

"We have initiated the turnaround by means of a change in management. In total, I am therefore far more optimistic for this segment than I was a year ago," he said in a statement.

Overall, TUI AG said it continued to expect turnover to rise between 2 and 4 percent and operating results to increase 6-12 percent in its financial year to end-September.

TUI Travel last week reported a smaller underlying operating loss for the first quarter and said that bookings for summer holidays had been strong.

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