annual report  accounts for the year ended 30 september 2011
we’re on a journey  
to an online driven future wwwtuitravelplccom
tui travel plc annual report  accounts 2011 1
group at a glance governance financial statements shareholder information
 contents
business and ﬁnancial review strategic overview
ifc group at a glance
ifc the investment case
02 tui travel overview
04 our structure
06 operational highlights
07 financial highlights 
08 strategic overview 
08 chairman’s statement
09 chief executive’s statement
10 an interview with the chief executive
12 market overview
14 business model
16 strategy
18 key performance indicators
20 principal risks
24 people
27 health  safety
28 sustainable development
32 business and ﬁnancial review
32 group performance 
35 segmental performance
44 current trading and outlook
46 governance
46 board of directors
48 directors’ report
50 statement of directors’ responsibilities
51 corporate governance report
56 remuneration report
66 financial statements
66 independent auditors’ report group
67 consolidated ﬁnancial statements
67 consolidated income statement
68 consolidated statement of comprehensive income 
69 consolidated balance sheet
70 consolidated statement of changes in equity
71 consolidated statement of cash ﬂows
72 notes to the consolidated ﬁnancial statements
137 independent auditors’ report parent company
138 parent company ﬁnancial statements
138 company balance sheet
139 notes to the company’s ﬁnancial statements
144 shareholder information
144 signiﬁcant shareholdings
144 financial calendar
145 contacts and advisers
146 shareholder discount
147 glossary of key terms
148 index
tui travel plc is one of  
the world’s leading leisure 
travel companies
find our 2011  
annual report online at 
httpara2011tuitravelplccom
the annual report  accounts contain forwardlooking statements that are subject  
to risk factors associated with amongst other things the economic and business 
circumstances occurring from time to time in countries and sectors in which the  
group operates it is believed that the expectations reﬂected in these statements  
are reasonable but they may be affected by a wide range of variables which could  
cause actual results to differ from those currently anticipated
market leading brands
we have some of the most recognised and highly trusted brands in the industry which reduces the  
cost of customer acquisition and means we are highly attractive to our accommodation providers and 
distribution partners 
differentiated unique products
we are committed to offering our customers a wide choice of differentiated and unique products which  
as well as enhancing customer satisfaction and retention also improves pricing power and produces a 
higher quality margin
market leading positions
we are either the number one or number two tour operator in almost all of our mainstream source 
markets including leadership positions in the uk germany france belgium the netherlands and canada
online driven
we are the european market leader in online package holiday sales in addition we have a market leading 
presence through our international online accommodation wholesalers and our uk accommodation online 
travel agent ota we also have a growing presence through our accommodation ota in asia and 
australia there is a prevailing trend towards online bookings in all of our source markets and increasing  
our share of sales made through online channels results in lower distribution costs and higher margins 
economies of scale
we buy over 150 million roomnights per year making us one of the largest distributors of accommodation 
globally our scale gives us a competitive advantage when negotiating with suppliers allowing us to offer 
excellent value to our customers
exposure to higher growth independent travel
almost one third of our proﬁts are generated by our accommodation  destinations and specialist  
 activity sectors which primarily serve the independent travel market these enjoy high growth and margin 
characteristics and include specialist tour operators offering unique experiential travel and online 
accommodation providers  
business improvement opportunities 
in 2009 we identiﬁed £142m of turnaround opportunities as we took strategic actions to improve margins 
in a number of underperforming businesses we delivered £53m of these in 2010 and £42m in 2011 we have 
identiﬁed further opportunities and expect £107m of business improvement proﬁts and cost savings to be 
delivered over the next three years 
emerging markets
we have established a signiﬁcant presence in the fast growing russian and ukrainian markets leaving us 
well positioned to take advantage of their potential we have an existing presence in brazil china and india 
and are investigating further opportunities in these exciting markets including capitalising on the outbound 
licence we have been granted with our joint venture partner in china
experienced management team
each of our businesses is led by highly experienced management teams giving us real strength and depth 
of leadership our leaders have demonstrated excellent track records of building strong businesses and 
creating value
wwwtuitravelplccom
the investment case
reasons to invest in tui travel plc wwwtuitravelplccom
2 tui travel plc annual report  accounts 2011 tui travel plc annual report  accounts 2011 3
business and ﬁnancial review governance financial statements shareholder information
wwwtuitravelplccom
australia
austria
belgium
brazil
canada
china
czech republic
denmark
finland
france
germany
hungary
india
ireland
italy
luxembourg
mexico
the netherlands
new zealand
norway
poland
russia
singapore
slovenia
spain
sweden 
switzerland
thailand
ukraine
united kingdom
united states
feature brands
tui travel operates more than 200 brands which are available to view on our website  
wwwtuitravelplccom a selection of our featured brands includes
who we are
tui travel plc group of companies tui travel or the group is one  
of the world’s leading leisure travel companies with over 200 trusted 
brands in 180 countries and more than 30 million customers
tui travel is proud to offer a rich diversity of travel experiences 
through its portfolio of individual and market leading brands  
grouped into four sectors – mainstream accommodation  
destinations specialist  activity and emerging markets 
tui travel is a truly global business employing approximately  
53000 people and operating in 31 key source markets worldwide  
as a dynamic inﬂuential company it is committed to responsible 
leadership in the travel sector 
tui travel is headquartered in the uk and listed on the london  
stock exchange as a member of the ftse 250 and ftse4good  
indices with the ticker code tt 
group at a glance group at a glance
tui travel overview
strategic overview group at a glance
in germany tui is one of the best 
known consumer brands and the 
favourite holiday brand for consumers 
and travel agencies alike it has a 
market leading position
wwwtuicom
thomson has been selling holidays 
from the uk for over 45 years and is 
still evolving it offers the full spectrum 
of holidays including summer holidays 
winter breaks and last minute 
getaways three quarters of holidays 
on offer are now exclusive to thomson
wwwthomsoncouk
fritidsresor is sweden’s largest tour 
operator offering mainstream holidays 
to sun and beach destinations including 
the mediterranean canary islands and 
thailand it also includes the airline 
tuifly nordic
wwwfritidsresorse
the moorings is the world’s leading 
yacht charter company with over  
650 yachts in 27 cruising destinations  
the moorings offers a collection of 
getaways from handson sailing or 
power yacht vacations to all inclusive 
private luxury crewed yachts 
wwwmooringscom
as the leader in polar expeditions 
quark offers unparalleled access to  
the world’s most remote regions to 
intrepid travellers from around the 
globe quark is recognised for its 
technical expertise leadership  
and passion for polar adventure
wwwquarkexpeditionscom
lateroomscom is the uk’s leading 
online accommodation site offering 
deals in over 50000 properties 
worldwide ranging from bbs  
to 5star luxury hotels
wwwlateroomscom
hotelbeds the international 
accommodation wholesaler has an 
online accommodation database  
of over 45000 hotels hotelbeds 
provides accommodation in 147 
countries from over 1500 hotel  
chains and independent hotels 
wwwhotelbedscom
intercruises shoreside  port  
services is an experienced global 
business offering ﬁrst class ground 
handling and port agency services to 
the ocean and river cruise industry
wwwintercruisescom
jetair is tui belgium’s master brand  
it is a tour operator offering a range  
of air and car holidays and city trips
wwwjetairbe
arke is the leading travel brand in the 
netherlands and a household name 
besides tour operating it operates  
128 travel shops a call centre and the 
airline arkefly 
wwwarkenl
airtours is a luxury holiday brand which 
has for more than 40 years provided 
the most comprehensive and individual 
offering of exclusive holidays in the 
germanspeaking market 
wwwairtoursde
crystal is the uk’s number one ski 
operator offering more choice of 
accommodation and resorts than 
anyone else to families beginner  
and advanced skiers as well as santa 
holidays and other winter activities
wwwcrystalskicouk
where we operate
tui travel is a truly global business operating  
in 31 key source markets
our 31 key source markets wwwtuitravelplccom wwwtuitravelplccom
4 tui travel plc annual report  accounts 2011 tui travel plc annual report  accounts 2011 5
business and ﬁnancial review governance financial statements shareholder information group at a glance strategic overview
northern region
the northern region comprises the distribution 
tour operating businesses and airlines based in 
the uk and ireland the nordic countries and 
canada the uk sells holidays through the two 
distinctive brands of thomson and first choice 
and ﬂies customers on the uk’s third largest 
airline thomson airways the nordics comprises 
the markets of sweden norway denmark and 
finland the nordics has number one or number 
two brands in all its markets
top selling brands
thomson first choice and fritidsresor
customer numbers
69 million excluding canada
top three destinations
spain including tenerife and the 
balearics greece and turkey
accommodation  
destinations sector
the accommodation  destinations sector ad 
is a global provider of travel services its businesses 
provide hotel accommodation transfers excursions 
and tours meetings and events and cruise handling 
services to tour operators travel agents corporate 
clients and customers worldwide ad competes  
in fast growing areas of the travel sector in four 
business lines accommodation wholesale 
accommodation online travel agent ota 
destination services and cruise handling 
top selling brands
hotelbeds laterooms bedsonline 
asiarooms intercruises and tui españa 
customer numbersroomnights
12 million passengers  
wholesale accommodation  
and destination services brands
214 million roomnights  
accommodation brands
top three destinations
spain uk and usa
specialist  activity sector
this sector’s ethos is ‘if you can dream it we  
can take you there’ the sector comprises over 
100 global travel businesses to fulﬁl the holiday 
and independent travel needs of customers  
with a wide range of interests and passions  
it operates under six divisions – adventure 
education marine north american specialist 
sport and specialist holiday group
top selling brands
crystal hayes  jarvis the moorings 
educational tours inc usa brightspark 
and le boat
customer numbers
15 million 
top three destinations
usa france and italy
emerging markets sector
the emerging markets sector is a portfolio of 
travel businesses focusing on the speciﬁc source 
markets of brazil russia  cis india and china 
we have a tour operator in russia  cis and are 
currently determining our strategy in brazil india 
and china using our inbound businesses in these 
countries to explore opportunities 
top selling brands
tui russia  cis
customer numbers
05 million
top three destinations
egypt turkey and spain
central europe
central europe comprises distribution tour 
operating businesses and airlines in the source 
markets of germany austria switzerland poland 
slovenia and the czech republic germany is the 
largest market in terms of customer numbers and 
tui is the market leading brand both here and in 
austria the business is focused on providing a 
unique service and great products at the best value
top selling brands
tui l’tur and 12fly
customer numbers
73 million
top three destinations
germany spain and usa
western europe
western europe comprises the leading tour 
operators and airlines in the netherlands 
belgium and france and two further tour 
operators in italy and spain its leading position  
in the french market is driven by differentiated 
club products while in the dutch and belgian 
markets it is driven by the integrated model  
of tour operators with airlines supported by  
a strong retail network
top selling brands
marmara jetair arke holland 
international nouvelles frontières  
and sunjets 
customer numbers
61 million
top three destinations
spain turkey and morocco
key activities
mainstream sector
the mainstream sector is the largest in the group in terms of scale and scope ﬁnancial performance  
and number of employees it comprises instantly recognisable ‘power’ brands leading tour operators 
approximately 3500 retail travel shops and a ﬂeet of 145 aircraft the sector has three operational 
divisions – the northern region central europe and western europe 
group at a glance
the chart opposite illustrates the  
underlying operating proﬁt mix  
by sector 
 
 
before central costs and emerging markets sector
group at a glance
our structure
in the ﬁnancial year ended 30 september 2011 tui travel was organised and managed  
through four sectors – mainstream accommodation  destinations specialist  activity  
and emerging markets
mainstream sector
accommodation  destinations sector
specialist  activity sector
 
73
14
13
by customer numbers by customer numbers wwwtuitravelplccom wwwtuitravelplccom
6 tui travel plc annual report  accounts 2011 tui travel plc annual report  accounts 2011 7
business and ﬁnancial review governance financial statements shareholder information
revenue 
11 £14687m
 
9
10 £13514m
underlying operating proﬁt 
11 £471m
 
18
10 £399m
underlying proﬁt before tax
11 £360m
 
25
10 £289m
free cash ﬂow
11 £451m
 
33
10 £339m
basic underlying earnings per share
11 236p
 
24
10 190p
dividend per share
11 113p
 
3
10 110p
 underlying results
1
 statutory results
  
£m 2011 2010
2
 change  2011 2010
2
revenue 14687 13514 9 14687 13514
operating proﬁt 471 399 18 255 44
proﬁtloss before tax 360 289 25 144 73
free cash ﬂow 451 339 33 451 339
basic earnings per share pence 236 190 24 77 111
dividend per share pence 113 110 3 113 110
1  underlying revenue operating proﬁt proﬁtloss before tax and eps exclude separately disclosed items amortisation of business 
combination intangibles acquisition related expenses predecessor accounting for magic life and interest and taxation of results of the 
group’s joint ventures and associates
2  prior year ﬁgures have been represented to include jet4you which was previously reported as a discontinued operation and to incorporate 
the results of magic life under predecessor accounting within revenue
•  record underlying operating proﬁts of £471m up 18 despite  
the challenging geopolitical and economic environment
•  record proﬁts delivered by the uk as a result of increased sales  
of differentiated and exclusive products with online being the 
biggest channel
•  record proﬁts also delivered by the nordic region belgium  
the netherlands canada and austria
•  record cash ﬂow generation with free cash ﬂow before dividends 
and acquisitions of £451m and a £4m net cash position providing 
balance sheet strength
•  signiﬁcant reduction in net separately disclosed items to £74m 
2010 £255m contributed to a £211m improvement in statutory 
operating proﬁt
•  strong underlying earnings per share growth of 24
•  business improvement target increased by £29m to £107m to  
be delivered in broadly even tranches over the next three years
•  johan lundgren appointed as deputy ceo with overall 
responsibility for mainstream
•  final dividend of 80p per share resulting in a full year dividend  
of 113p per share up 3 on 2010 comfortably covered by both 
earnings and free cash ﬂow
group at a glance
financial highlights
group at a glance
operational highlights
group at a glance strategic overview wwwtuitravelplccom wwwtuitravelplccom
8 tui travel plc annual report  accounts 2011 tui travel plc annual report  accounts 2011 9
group at a glance strategic overview business and ﬁnancial review governance financial statements shareholder information
initiatives across the group and the improvement  
in working capital as a result of these initiatives has 
helped us to end the year in a net cash position
as one of the world’s leading leisure travel companies 
we operate in a highly regulated industry from both a 
tour operator and an airline perspective we work with 
national governments and the eu to ensure that our 
position is understood and respected and our opinion 
remains that a level playing ﬁeld across the industry  
is a necessary requirement to allow good companies 
to ﬂourish
we have a clear strategy and road map for delivering 
our strategic growth initiatives as trading in the new 
ﬁnancial year progresses it is apparent that customers 
in some source markets are booking later than usual 
and that the recovery in demand for north african 
destinations will be slow for some considerable time 
we have adjusted our winter capacities to reﬂect the 
current market conditions and are trading in line 
with our expectations summer capacities will be 
ﬂexed to match proﬁtable demand
we remain focused on our strategy of increasing the 
proportion of sales of differentiated and exclusive 
product and on increasing controlled distribution with 
a focus on online to enhance our customer access and 
reduce distribution costs through our new business 
improvement programme we have selfhelp measures 
in place to help offset the difﬁcult macroeconomic 
environment including clear plans in place for germany 
and france in addition we continue to strengthen our 
cash ﬂow in order to fund the dividend and growth 
all of which means that even with the current 
challenging market conditions we continue to 
operate from a position of strength
finally i am very proud of all my colleagues – 
53000 of them – who are passionate about our 
business and who each year face new challenges 
head on i would like to thank them for all their 
efforts and achievements not only in their own 
businesses but also at the wider group level
peter long
chief executive
these achievements reﬂect the strength of our 
strategy to increase differentiated and exclusive 
product sales increase controlled distribution with 
a focus on online to enhance customer access and 
reduce distribution costs and the delivery of our 
turnaround and cost efﬁciency programmes
having experienced a strong start to trading at the 
beginning of the ﬁnancial year the events of the 
´ arab spring´ affected our performance and we 
reported a £29m impact for the ﬁrst half the 
ﬂexibility we have in our business model meant we 
were able to act quickly and move capacity for the 
summer season from egypt and tunisia to other 
destinations including spain greece and turkey 
– thereby mitigating the full year effect for all our 
source markets except france our french tour 
operators rely heavily on these destinations where 
historically they have collectively accounted for 
about 40 of the programmes and 65 of 
marmara’s alone this together with a weaker 
consumer environment meant that they were 
adversely impacted for the full year and results  
for this source market were very poor we have 
initiated a project to consolidate the businesses of 
the french tour operators with the aim of creating 
a single business with a long term viable future
across the rest of the group we delivered a good 
trading performance in the uk nordic region 
belgium the netherlands canada and austria  
the performance of our differentiated product 
continues to be encouraging we continued to 
make good progress in business improvement 
turnaround and cost efﬁciency especially in 
canada the netherlands and ireland which  
have now all completed their turnarounds the 
performance in canada is particularly pleasing 
where following the completion of the joint venture 
with sunwing the business has transformed itself 
to become a market leader we also achieved a 
signiﬁcant reduction in net separately disclosed 
items which were £74m 2010 £255m 
we continue to focus on cash performance and ended 
the year with a net cash position of £4m 2010 net 
debt of £249m we have a number of cash management 
chairman of the remuneration committee effective  
from that date also post year end on 20 october 
2011 johan lundgren an executive director  
was promoted to deputy chief executive with 
responsibility for the mainstream sector johan 
was previously managing director of the northern 
region of the mainstream sector
the tui travel plc board has resolved to adopt  
a policy designed to achieve at least 25 female 
representation among its members by 2015 
sustainable development
at tui travel we have a ﬁrm commitment to 
sustainable development and our goal is to make 
travel experiences special we seek to achieve this 
whilst minimising environmental impact respecting 
culture and people and bringing economic beneﬁts 
to communities the past year has seen our 
businesses continue to drive ecoefﬁciencies which 
have brought ﬁnancial as well as environmental 
beneﬁts and sustainability has also stimulated  
a number of product innovations there is also 
evidence that our most sustainablymanaged 
hotels are also those which are delivering higher 
quality and customer satisfaction see sustainable 
development on page 28
colleagues
we are a truly international business and our team 
of colleagues numbering some 53000 are based 
worldwide a large proportion of our colleagues are 
customer facing and the level of service they deliver 
to our customers is an essential part of the leisure 
travel experience we have a committed team 
across the whole organisation and on behalf of  
the board i would like to thank them for their  
much valued contribution to our success 
dr michael frenzel
nonexecutive chairman
in january the group updated the market on its 
strategic priorities and the roadmap to achieve 
these objectives since then we have faced not 
only the events that occurred in some of our key 
north african destinations but also increasing 
global economic uncertainty it is testament to  
the strength of our business and its ﬂexibility  
that we have achieved the results that we have
results
the group has achieved an 18 increase in 
underlying operating proﬁt to £471m 2010 
£399m on revenue of £14687m 2010 £13514m 
underlying proﬁt before tax is up 25 to £360m 
2010 £289m underlying earnings per share 
increased 24 to 236p 2010 190p following a 
reduction in separately disclosed items the group’s 
statutory proﬁt before tax was £144m 2010 loss 
of £73m
dividends
the board is recommending a ﬁnal dividend of 80p 
per share 2010 78p on 10 may 2011 the board 
recommended an interim dividend of 33p per 
share 2010 32p thereby resulting in a full year 
dividend of 113p per share 2010 110p the 
group has a progressive dividend policy and will 
look to maintain underlying dividend cover at just 
over two times
board
two of our nonexecutive directors jeremy hicks 
and giles thorley resigned from the board in 
january 2011 and on 4 april 2011 minnow powell 
joined the board as a nonexecutive director and 
chairman of the audit committee in september 
we welcomed another nonexecutive director to 
the board coline mcconville post year end on  
19 october 2011 clare chapman stepped down 
from the board and bill dalton was appointed 
strategic overview
chief executive’s statement
strategic overview
chairman’s statement
having faced a number of geopolitical events in 2011 the most serious of which 
was the north african crisis we are pleased to have achieved an 18 increase in 
underlying operating proﬁt for the full year to £471m 2010 £399m
we are pleased with our performance in 2011 and have delivered another year  
of record proﬁt growth and strong cash ﬂow against a backdrop of unrest in key 
north african destinations and weak consumer sentiment in some source markets wwwtuitravelplccom wwwtuitravelplccom
10 tui travel plc annual report  accounts 2011 tui travel plc annual report  accounts 2011 11
group at a glance strategic overview business and ﬁnancial review governance financial statements shareholder information
you have appointed johan lundgren 
as deputy chief executive with 
responsibility for the mainstream 
sector – a sector that you’ve decided 
is critical to your plans in the future – 
this must indicate that mainstream is 
incredibly important to you
yes four years on from our merger much has  
been achieved including integrating two very big 
businesses in the uk – thomson and first choice
we are now at the next stage of our development 
and for us to achieve what we want with modern 
mainstream we need to be best in class not in 
pockets of mainstream but across all the 
mainstream businesses 
johan is a ﬁrst rate tour operator and leader  
he successfully led our nordics businesses and 
more recently took overall responsibility for  
tui uk  ireland which has achieved an excellent 
performance what johan will do with his 
experience and his enthusiasm is to take the 
business to the next stage to ensure that our 
business model is robust not just for the next two 
to three years but to the end of this decade and 
into the next decade so by the time we’re at 2025 
we can say we’ve changed our business and we’ve 
adapted our business to satisfy the customers’ 
needs of today and that requires us to continue  
on a journey of change and innovation 
so is johan’s promotion an  
indication that perhaps you  
are thinking of retiring
far from it i’m as excited and committed to tui 
travel and the next stage of our journey as i’ve  
ever been what it does reﬂect however is the 
importance of johan’s role it also shows how 
seriously we take management succession and 
capability in the group i am delighted to say that 
following johan’s appointment we have promoted 
from within which is testament to the strength  
and capability of our management team
next year will see the introduction  
of the eu emissions trading scheme 
or ets how do you feel about having 
yet another tax being imposed upon 
your group
we advocate legislative frameworks that reward 
and incentivise businesses like ours that strive to 
continuously improve environmental efﬁciency  
and invest in lowercarbon technology what we 
need however is a level playing ﬁeld so i am very 
concerned that this could become a situation  
where it is only european airlines facing ets
also in a number of our source markets and 
particularly the uk we already pay signiﬁcant 
passenger duty taxes and eu ets should not  
be about double taxation
on top of your cash ﬂow and your 
proﬁts you’ve also announced a 
business improvement programme so 
obviously you’re not being complacent 
about your success
that’s absolutely right at the beginning of the 
ﬁnancial year we said that we expected to deliver a 
further £89m through our turnaround programmes 
across our mainstream businesses and an 
additional £40m of cost savings and efﬁciencies 
across the group over a threeyear period this 
year we have delivered £63m of this total
we have since then identiﬁed further turnaround 
opportunities and cost efﬁciencies across the 
group and have combined them under a new 
business improvement programme and as a result 
we have increased our target to £107m which we 
expect to deliver over the next three years 
you announced earlier in the year  
that from next summer the first 
choice programme would be an all 
inclusive brand why did you make  
this decision
a not inconsiderable number of our customers like 
the certainty of knowing what the overall cost of 
their holiday is going to be before they go away 
particularly in the current economic environment 
our first choice brand was already 65 all 
inclusive and by making it an all inclusive brand  
we have a clear differentiator
so what is your response to those who 
might argue that all inclusive holidays 
are harmful to local communities
we try to fulﬁl our customers’ holiday needs in  
the most responsible way that we can and we are 
mindful that all inclusive holidays evoke strong 
opinions in our view the key issue is whether a 
hotel is being operated responsibly in relation  
to the environment and the local community 
whatever its board basis the evidence we have  
to date shows that our all inclusive properties 
employ more local people on higher beneﬁts we 
promote the use of local produce and encourage 
our customers to buy local goods and to take 
excursions to the surrounding area in a number  
of destinations all inclusive properties are bringing 
improved economic beneﬁt to that particular 
region we are involved with several research 
projects into all inclusive which will guide our 
efforts to ensure our holidays beneﬁt communities 
as well as our customers
strategic overview
what we mean by differentiated and exclusive 
product is a holiday that you can only get from  
us we either deﬁne the concept and own it  
like sensatori blue villages sensimar or holiday 
villages or we are the exclusive tour operator in  
a particular hotel in a particular source market  
we are increasing the share of differentiated and 
exclusive holidays and moving away from product 
that you can get from anyone and which we 
consider to be commodity
having a direct relationship with the customer  
is very important for us and we believe that this  
will increasingly be through online channels
how important to tui travel is the 
online side of your business
we regard it as a vital part of our business and not 
just a channel to market we will be driving online 
growth across all our businesses whatever leisure 
travel experiences they satisfy in the nordics  
our businesses are already online driven and our 
online accommodation wholesalers and online 
travel agents have been delivering an average 
cagr of 25 and 33 respectively 
one thing you have done this year  
is generate an extremely strong cash 
ﬂow which has been the envy of many 
of your competitors how did you 
manage to do that
we have turned our operating proﬁts into cash  
and that’s ultimately what we have to do and we’ve 
demonstrated our ability to be able to grow the 
business successfully through these initiatives and 
particularly around modern mainstream also 
around the other range of products that we have 
within our specialist businesses whether that’s our 
yacht ﬂeet where we’re number one in the world 
with over 1200 yachts whether it’s all our boats on 
the inland waterways across europe – a very broad 
choice of leisure travel experiences which is quite a 
unique portfolio when one compares with the rest 
of our competitors in the market 
we were able to reduce net debt and end the year 
in a positive position continued improvement in 
cash ﬂow is a key target for us in order to fund the 
dividend and future growth
so peter how did you manage to 
perform so well
i am very pleased with our performance this year 
we have achieved another year of record proﬁts 
this is despite us being affected by the events of 
the ‘arab spring’ which we estimate probably cost 
us something in the region of £70m but which we 
were able to mitigate in all our markets except 
france which has a huge reliance on north african 
destinations particularly egypt and tunisia 
we had a strong performance in most of our 
source markets and the ﬂexibility in our business 
model meant that when the ‘arab spring’ hit us  
we were able to quickly move capacity away from 
those affected destinations and secure additional 
beds particularly in the western mediterranean
the breadth of businesses that we have across  
the group means that we are able to satisfy most 
leisure travel requirements through either our 
‘product driven’ or ‘price driven’ propositions
within product driven you will ﬁnd our modern 
mainstream differentiated and exclusive product 
as well as our specialist and activity products price 
driven includes mainstream commodity packages 
and our online accommodation providers
we have a clear strategy and road map for 
achieving our strategic goals and with a strong 
committed management team we operate from  
a position of strength 
you’ve identiﬁed ‘modern mainstream’ 
as central to your strategy for 2012 
what do you mean by modern 
mainstream and how are you going  
to approach it
modern mainstream is about building on the 
journey of offering this unique and exclusive 
product – we need to give customers the reason 
why they should book with us and i think that 
exclusive offering is very important the other 
important factor with modern mainstream is to 
give the customer the opportunity to book their 
holiday through any channel that they wish and  
the importance of online today whether it’s 
researching the holiday whether it’s booking the 
holiday or whether it’s a combination of using 
research plus going to one of our travel agents 
modern mainstream encompasses those two key 
aspects – the uniqueness of holiday experience and 
the choice of channels with which our customers 
can book their holidays 
strategic overview
an interview with the 
chief executive peter long
2011 has been a turbulent year for the travel industry with global economic uncertainties and many 
companies hit hard by the arab spring uprisings still tui travel a leader in the market has in these 
difﬁcult times recorded a proﬁt to understand how tui travel has weathered the storm and get some 
insights into their strategies for 2012 we’re joined now by chief executive of tui travel peter long 
view the  
interview online
httpara2011tuitravelplccom strategic overview
wwwtuitravelplccom wwwtuitravelplccom
12 tui travel plc annual report  accounts 2011 tui travel plc annual report  accounts 2011 13
group at a glance strategic overview business and ﬁnancial review governance financial statements shareholder information
  world travel and tourism council’s 
economic impact report 2011
  united nations world tourism 
organisation unwto united nations 
environment programme unep and 
world meteorological organisation 
wmo october 2007 climate change 
and tourism responding to global 
challenges
outlook future trends and factors
while the global recession and uncertain economic 
environment have had an effect on consumer travel 
spending habits demand for leisure travel remains 
strong the mainstream holiday market our 
traditional stronghold has seen a resurgence  
in a tough economic environment we have 
continued to modify our product offering in  
line with consumer preferences to include more 
differentiated and exclusive products as well as 
ﬂexibility of duration our all inclusive holidays  
have proved particularly popular as consumers 
seek more ﬁnancial certainty of their total holiday 
spend in the uk we announced that from summer 
2012 the first choice brand in the uk would be 
completely all inclusive – a reﬂection of growing 
consumer demand 
independent travel which has experienced 
consistently strong growth over the years remains 
a key focus area for tui travel as the demand for 
independent travel continues to increase we seek 
to expand our already signiﬁcant positions within 
this segment of the market
in 2011 an increasing number of consumers  
turned to online channels to research and book 
their holiday we expect this trend to continue  
into 2012 and beyond where our mainstream 
businesses expect to see an even greater share  
of online bookings we therefore remain focused 
on improving our online presence increasing our 
participation in social media and moving towards  
an onlinedriven company culture 
we believe the bric brazil russia india and 
china economies with high growth forecasts  
will be the key driver of long term travel growth 
tui travel already has a presence in russia and 
ukraine which we plan to increase from the existing 
platform and we continue to determine our 
participation strategy in brazil india and china
we remain cautious about 2012 given the 
continued economic uncertainty in europe a slow 
recovery of demand to north african destinations 
and increased volatility in fuel prices and currency 
exchange rates there is however every reason  
to believe that the demand for leisure travel will 
continue to experience robust growth in the long 
term tui travel has already proved resilient in  
a challenging market environment and with a 
heritage in leisure travel and a diverse range of 
experiences on offer the company is well placed
the political climate
travel and tourism are heavily regulated industries 
as a global organisation tui travel has a public 
affairs team that works with governments and 
regulators across key source markets to address 
issues affecting our industry and customers
the issue of air passenger rights has assumed 
particular importance the european institutions 
having focused heavily on this issue during the year 
our public affairs team has engaged regularly with 
politicians and ofﬁcials both in brussels and in key 
source markets in order to ensure that regulation 
properly balances the needs and interests of 
customers and industry
the question of aviation taxation has also ﬁgured 
prominently in a number of jurisdictions and we 
have together with trade associations and other 
industry partners sought to press our case for  
a more equitable taxation regime that properly 
rewards and incentivises efﬁcient use of aircraft
financial protection of air passengers continues  
to be an issue particularly in the uk and we  
have continued to lobby stakeholders to ensure  
a fair and affordable system of protection good 
progress has been made in this area with the  
uk government announcing plans for a series  
of key reforms 
finally our work to inﬂuence the european 
commission to extend the scope of the european 
package travel directive in order to reﬂect the 
changes in the industry since the inception of that 
regulation has continued and we see clear signals 
that the european commission is now persuaded 
of the need for reform
the sustainability challenge 
travel and tourism will account for 9 of global 
gdp in 2011 the industry will continue to be  
one of the world’s fastest growing sectors with 
emerging economies in particular seen as engines 
of such growth travel and tourism today is 
responsible for 9 of global employment but  
also for 5 of global carbon dioxide emissions 
from a sustainable development perspective this 
poses an interesting challenge – the growth of  
an industry highly dependent on fossil fuels and 
biodiversity in a world of ﬁnite natural resources 
at tui travel we have long embraced this  
challenge we are actively working towards our  
goal of providing special travel experiences whilst 
minimising environmental impact respecting the 
culture and people in destinations and bringing  
real economic beneﬁt to local communities we 
recognise these as issues on which the future 
health of our own business and of the wider 
industry depend hence the alignment of our 
sustainability programme with tui travel’s strategy 
and our record across the industry of inspiring 
change and leading by example see sustainable 
development on page 28
provide our customers with easytoaccess 
information combined with easytouse booking 
engines tui travel’s mainstream businesses have 
seen a consistent year on year increase in online 
bookings in the past year the nordic business  
took 61 of its bookings online and in the uk 
online sales made up 39 of total bookings 
tui travel’s accommodation wholesaler businesses 
hotelbeds bedsonline and hotelopia continue  
to experience strong growth and have established 
leading positions in this market in the 
accommodation only online travel agency ota 
segment lateroomscom now commands 25 
market share in the uk and is among the top ota 
players within europe the apac region with high 
annual growth forecasts in the accommodation 
ota segment is of increasing importance to tui 
travel to strengthen our position in this market 
we continue to invest in the asiarooms brand
the economic environment
the global economic environment experienced  
two distinct phases in 2011 a recovery in early 
2011 curtailed the fears of a doubledip recession 
this has however been followed by a period of 
slow growth and economies across europe now 
face the prospect of a pronounced slowdown 
the imf projects real gdp growth worldwide at 
40 for 2011 and 2012 – 05 lower than its 
previous projection in april 2011 the gdp growth 
of our two largest source markets germany and 
uk is also expected to slow to 27 and 11 
respectively while unemployment has continued  
to rise in the uk and currently stands at 83 
unemployment in germany rose unexpectedly for 
the ﬁrst time in over two years in october 2011 and 
now stands at 7 the economic outlook for 2012 
remains uncertain with continued uncertainty in 
north africa the ongoing eurozone crisis and 
volatility in fuel and currency prices
the leisure travel market
in 2010 international tourism saw a strong 
recovery driven primarily by better global  
economic conditions and compared to 2009  
total international arrivals grew by 7 unwto 
tui travel’s ten core source markets including  
the uk sweden germany france belgium the 
netherlands austria poland switzerland and 
canada make up £388bn of global travel spend 
euromonitor with our three largest markets  
of germany france and the uk totalling 65  
of this spend
with approximately a one third share of the 
european mainstream holiday market tui travel 
occupies a strong position we have number one  
or two brand positions across all our core markets 
and as the traditional mainstream markets mature 
we continue to differentiate ourselves by offering a 
greater choice of unique products and destinations 
as well as looking to new markets for growth 
independent travel which includes selfpackaged 
holidays specialist holidays accommodation only 
and online travel agencies continues to be the 
fastest growing area of leisure travel tui travel  
has market leading positions in a number of 
specialist segments within independent travel  
and we plan to continue to expand this portfolio  
of fast growing businesses
the online travel market is a key area of focus 
according to phocuswright the global online travel 
market is estimated to be worth £181bn europe 
and the usa led the way in online sales in 2011 
generating approximately 75 of global online 
revenues and growing 10 and 8 respectively 
year on year the asiapaciﬁc apac region 
however continues to grow at a much faster rate  
of 17 year on year with the signiﬁcant proportion 
of future growth estimated to come through online 
channels we remain focused in our efforts to 
strategic overview
market overview
£346bn
£42bn
our three largest markets
france
uk
germany
£85bn
£106bn
£61bn
 core markets include
uk sweden germany
france belgium netherlands
austria poland switzerland
and canada
euromonitor
tui travel’s core markets account  
for £388bn of global travel spend strategic overview
wwwtuitravelplccom wwwtuitravelplccom
14 tui travel plc annual report  accounts 2011 tui travel plc annual report  accounts 2011 15
group at a glance strategic overview business and ﬁnancial review governance financial statements shareholder information
strategic overview
business model
in recent years our business model has been redeﬁned to address evolving trends in leisure 
travel by deﬁning our customers in one of two ways we are able to anticipate their future 
preferences and leverage our position to tailor our offering accordingly
• leading brands
• leveraging scale
• online driven
• experienced management teams
• common technology platforms
1  global market 
trends
we actively seek to understand 
consumer needs anticipate what 
they might demand in the future 
and move quickly to offer them  
the right product at the right time
4  key success factors 
the key success factors form the backbone of our business model 
and enable us to cater efﬁciently to global trends while maintaining 
our leading market positions each of the categories product driven 
and price driven has a unique set of factors that make it thrive 
there are however a few critical factors that transcend both 
2  our customers 
based on global market trends we 
deﬁne our customers in two ways
5  outcome 
both propositions are focused  
on our vision of making travel  
experiences special 
3  product 
characteristics
product driven products satisfy 
the increasing demand for 
differentiated exclusive ﬂexible 
and experiential holidays that are 
unique to tui travel price driven 
products satisfy the demand for  
a broad range of holidays with 
competitive pricing
growing 
demand for 
leisure travel 
•  customers seek value
•  ‘go online’  
search compare book  
and share
•  individualisation
•  new business model 
online travel agencies 
search engines low cost 
carriers
•  increased demand for  
experiential holidays
•  demand from  
emerging markets
making
travel
experiences
special
product
driven
modern mainstream 
differentiated 
exclusive product
specialist   
activity products
high volume  
high margin  
demand driven
customer service
orientated business
 
•  high volume
•  competitive pricing
•  range and diversity of hotel stock
•  lowest cost
price 
driven
mainstream 
commodity packages
online accommodation
high volume lower margin 
and price driven business
high barriers to entry
•  unique and innovative concepts 
and products
•  supplier relationships
•  cost relevant
•  commitment and yield management
•  product knowledge strategic overview
wwwtuitravelplccom wwwtuitravelplccom
16 tui travel plc annual report  accounts 2011 tui travel plc annual report  accounts 2011 17
group at a glance strategic overview business and ﬁnancial review governance financial statements shareholder information
distribution
each of our source markets has its own distribution 
strategy which is tailored to meet different 
customer preferences and market dynamics all 
markets however have a goal of increasing their 
levels of controlled distribution and reducing their 
costs of distribution through the efﬁcient operation 
of retail shops and call centres and the effective 
use of online sales channels strong controlled 
distribution with a focus on online sales has the 
beneﬁt of 1 making it easier for us to understand 
customer needs and tailoring our products 
accordingly 2 improving brand and product 
loyalty and 3 enabling us to reduce our cost  
of distribution thereby increasing margins in the 
mainstream sector 65 of sales are now made 
through controlled channels 2010 62 and 30 
of sales are made online 2010 27
operational efﬁciency
one of the key areas of focus for the mainstream 
business is to be as cost efﬁcient as possible 
without making any compromises on customer 
experience we are currently in the process of 
building new reservation systems in key source 
markets which will lower our production and  
back ofﬁce costs and at the same time improve 
customer experience we are also taking a closer 
look at our airlines with the goal of making them  
as efﬁcient as possible
product 
differentiation is one of the central pillars of our 
product strategy within our mainstream sector  
and we have a clear focus on increasing our 
differentiated and exclusive product offering across 
all source markets by their nature differentiated 
products are unique in the marketplace and 
difﬁcult to replicate by competitors they 
command a margin premium and attract greater 
customer loyalty leading to higher repeat booking 
rates in addition earlier booking trends for 
differentiated content enable us to manage  
our capacity and yield more effectively
in the mainstream sector the level of differentiated 
product has increased over the last year and 
currently represents 41 of total holidays  
we have speciﬁc targets to increase the level  
of differentiation and continue to evolve product 
content in the uk we have introduced the 
thomson couples concept all 16 hotels in this 
concept are child free in the nordics two new blue 
villages were opened in turkey and mallorca and  
in germany the sensimar portfolio grew from ﬁve 
to ten hotels
strategic overview
strategy
strategic growth initiatives
mainstream
we have redeﬁned our mainstream business model from ‘traditional’ to ‘modern’ mainstream with a focus 
on differentiated and exclusive product being online driven and cost efﬁcient
tui travel’s strategic goal is to create superior shareholder value by being the 
leading global leisure travel group providing customers with the widest choice 
of differentiated and ﬂexible travel experiences to meet their changing needs 
and maintaining our commitment to sustainable development
our four strategic imperatives of product and content distribution and brands 
people and operational effectiveness and growth and capital allocation underpin 
everything our businesses do in addition the group is focused on three 
strategic growth initiatives product distribution and operational efﬁciency
the backbone of hotelbeds’ rapid expansion and 
has also enabled it to outperform the market 
consistently with 21 growth in total transaction 
value in 2011 bedsonline the accommodation 
wholesaler that sells directly to travel agencies  
has been rapidly expanding its distribution 
channels and since 2009 has entered into 11 new 
markets including the us brazil russia thailand 
and singapore bedsonline now works with over 
23500 travel agencies and sold 46 million roomnights 
in 2011 compared to 38 million in 2010
within specialist  activity we are focusing on 
increasing the share of direct distribution to reduce 
distribution costs and increase direct access to 
customers we have also recently launched the 
online iexplore portal which aggregates products 
from 20 uk brands showcasing 120 activities 130 
destinations and over 1500 products key features 
of the site include the ability to search ﬁlter and 
compare activity products side by side plus an 
‘inspirator travel proﬁler’ which matches your 
travel personality to holiday experiences
operational efﬁciency
there is an increased focus on operational 
efﬁciency within our specialist  activity 
businesses an optimal cost structure for the 
sector includes a reduction in the number of 
ﬁnance and reservation systems together with  
cost reductions gained by centralising certain  
back ofﬁce functions 
product
increasing our hotel inventory and the range of 
accommodation will be the major growth driver  
for our online accommodation businesses in the 
accommodation  destinations sector within the 
apac region we are looking to expand into new 
source markets with the asiarooms brand and 
have already translated the site into ﬁve languages 
traditional chinese and simpliﬁed chinese thai 
malaysian and indonesian sourcing the right hotels 
in the right destinations will be a key success factor 
within our portfolio of specialist  activity 
businesses there continues to be strong demand 
for experiential holidays we plan to consolidate 
our market leading positions within the specialist  
 activity businesses and continue to look for 
innovative products and attractive markets for 
further growth during the year in the marine 
division our inland waterways brand le boat 
launched the new 1500 series of boats which 
introduces a new level of luxury to the inland 
waterways markets with a signiﬁcantly enhanced 
customer experience
distribution
efﬁcient use of online distribution channels  
is at the forefront of our strategy within the 
accommodation ota and accommodation 
wholesaler businesses in 2011 hotelbeds the 
international accommodation wholesaler covered 
over 100 source markets and more than 500 
destinations a robust it infrastructure has been 
independent
tui travel already has market leading positions in independent travel including online accommodation 
marine adventure education language travel ski sport and specialist holidays as the demand for 
independent travel grows we aim to leverage tui travel’s strong position in the segment and further 
enhance our offering and reach
emerging markets
our emerging markets strategy continues to  
focus on russia  cis where we have successfully 
completed three acquisitions with our venture 
partner sgroup capital management and 
successfully launched the tui brand into the 
market we are now focusing on increasing our 
presence from this platform
we also have a presence in brazil china and  
india through our accommodation wholesaler and 
destination services businesses in china we are 
delighted that this year tui travel has been one  
of the three foreign companies to be granted an 
outbound operating licence under a new pilot 
scheme introduced by the chinese national 
tourism authority this licence creates a new 
source market for us with extensive growth 
prospects we will continue to determine our 
participation strategy in the emerging markets  
to create long term sustainable growth for tui 
travel on a global scale
traditional mainstream
commodity packages
7 and 14 night durations
brochure and retail led
call centre based customer support
modern mainstream
differentiated unique holidays
flexible durations
online multimedia product marketing
online selfservice wwwtuitravelplccom wwwtuitravelplccom
18 tui travel plc annual report  accounts 2011 tui travel plc annual report  accounts 2011 19
group at a glance strategic overview business and ﬁnancial review governance financial statements shareholder information
strategic overview
 strategy target performance key performance indicators
financial    
product    
distribution    
operational  
efﬁciency    
nonmainstream  
growth    
responsible  
leadership    
our main strategic objective is to improve the group’s proﬁtability 
and free cash ﬂow and to deliver enhanced returns on investment  
we believe that improving our ﬁnancial performance will allow us to 
invest in the future of our business for the beneﬁt of shareholders 
colleagues and customers
we target continuous 
improvement in group return  
on invested capital roic and 
cash conversion of at least 70 
of proﬁt before tax
to measure our ﬁnancial progress we have two ﬁnancial kpis  
i the roic and ii conversion of underlying proﬁt before tax  
to free cash ﬂow 
roic has improved by 16 percentage points to 113 this was  
driven by improvements in earnings in the year and a reduction in  
the deﬁned beneﬁt pension net deﬁcit as a result of measures taken 
to manage future liabilities the improvement further justiﬁes our 
‘assetright’ approach to managing the business
following an exceptional cash performance in 2010 as a result of 
signiﬁcant improvements to working capital we are pleased with our 
cash conversion rate of 125 in 2011 we expect the conversion rate 
to fall in the next few years as we invest in order to improve under 
performing businesses but that will return to a conversion rate of at 
least 70 once the business improvement programme is delivered
roic
2011 2010 2009
113 97
1
 84
1
cash conversion
2011 2010 2009
125 105
1
 46
1
1  2010 and 2009 represented for jet4you and magic life predecessor accounting 
2010 proﬁts based on pro forma unaudited underlying operating proﬁt excluding 
the impact of volcanic ash
increasing the proportion of our products which are different to  
those offered by our competitors is key to our strategy differentiated 
products have earlier booking curves higher customer satisfaction and 
retention and superior margins these products are difﬁcult for 
competitors to replicate and we have a signiﬁcant competitive 
advantage due to our existing brand loyalty and experience of 
designing and operating new concepts
we are targeting a differentiated 
product mix of greater than  
50 as a proportion of total 
mainstream sector holidays
in the year we increased the differentiated product mix by three 
percentage points across the mainstream sector as a whole within 
this the nordic region improved by thirteen percentage points and 
the uk by ﬁve percentage points
differentiatedexclusive product mix as a proportion of total 
mainstream sector holidays
2011 2010 2009
41 38 37
increasing our direct distribution mix with a focus on online sales is a 
key driver of reducing our distribution costs and enhancing customer 
relationships direct distribution typically represents the most 
efﬁcient distribution method and allows us to provide even better 
value to customers in addition customer trends support a shift 
towards the online channel and multimedia product marketing 
provides the opportunity to incorporate richer content driving  
higher conversion rates
we are targeting a controlled 
distribution mix of greater  
than two thirds and an online 
distribution mix of greater than 
40 in our mainstream sector 
to measure our progress we have two distribution kpis i controlled 
distribution mix and ii online distribution mix
controlled distribution mix improved by three percentage points in 
2011 with a strong performance by the nordics and belgium the 
improvement in controlled distribution was driven by the online 
channel which also increased by three percentage points in 2011
controlled distribution mix as a proportion of total mainstream 
sector holidays
2011 2010 2009
65 62 59
online distribution mix as a proportion of total mainstream  
sector holidays
2011 2010 2009
30 27 25
our aim is to be as cost efﬁcient as possible without compromising 
customer experience we have identiﬁed a number of business 
improvement opportunities within our mainstream source markets 
which centre around legacy airline and systems costs within 
mainstream we target overheads of less than 5 in each source 
market in addition we are focused on making cost savings in our 
other sectors for example through centralisation of back ofﬁce 
functions where appropriate
we are targeting a further 
£107m of business improvement 
opportunities over the next 
three years to be delivered  
in broadly even tranches 
we delivered £63m of turnaround and cost saving opportunities in 
2011 and were particularly pleased with our performance in canada 
which delivered £23m of proﬁt improvement exceeding the original 
target of £11m
turnaround and cost savings delivered
2011
£63m
the specialist  activity and accommodation  destinations sectors 
enjoy higher margin and growth characteristics these operations are 
difﬁcult to replicate as we have crucial ﬁrstmover advantage having a 
relevant position in the independent travel markets that are served by 
these sectors is strategically important and a key differentiator and 
growth driver for the group organic growth will be the key driver of 
proﬁt growth in these sectors
we are targeting an average 
organic growth rate of 
approximately 10 per annum 
in the sa and ad sectors  
in the next three years
the sa and ad sectors have grown on average by 6 per annum 
since the merger 2007 the average organic growth rate since 
merger fell from 7 in 2010 to 3 in 2011
2
 mainly due to challenging 
trading conditions in the adventure and education divisions of the 
sa sector
compound annual growth rate in the sa and ad sectors’ organic 
proﬁts since merger
20072011 20072010
3
2
 7
2  excluding £10m investment in the ota
we are experiencing greater consumer awareness of sustainability and 
believe that creating more sustainable holidays will help protect our 
product into the future and also support product differentiation 
brand loyalty customer satisfaction and competitive advantage
we are targeting our airlines to 
reduce per passenger carbon 
emissions by 6 by 201314 
against a baseline of 200708 
see sustainable development 
page 28
three years ago tui travel airlines set a target to reduce carbon 
emissions by 6 by 201314 against a baseline of 200708 both on  
a total and relative basis in 201011 tui travel airlines’ total carbon 
emissions were 5467814 tonnes ie 9 less than in 200708 whilst 
our relative carbon emissions in 201011 were 759g per revenue 
passenger kilometre co
2
rpk ie 26 less than 200708
carbon efﬁciency measured through tui travel airlines’ average 
carbon emissions per revenue passenger kilometre co
2
rpk 
2011 2010 2009
759g 761g 781g
co
2
rpk co
2
rpk co
2
rpk
strategic overview
key performance indicators kpis
 achieved through operational efﬁciencies fuel conservation and capacity amendments 
as well as the emission reductions which occurred in 200910 following the strategic 
venture with air berlin wwwtuitravelplccom wwwtuitravelplccom
20 tui travel plc annual report  accounts 2011 tui travel plc annual report  accounts 2011 21
group at a glance strategic overview business and ﬁnancial review governance financial statements shareholder information
strategic overview strategic overview
principal risks
such risks are reviewed by our group functions 
sectors and source markets on a quarterly 
basis and measured against predeﬁned 
criteria relevant to the speciﬁc business area 
to ensure that challenges are prioritised and 
managed in order of signiﬁcance it is the 
responsibility of sector boards across the 
group and senior management teams 
beneath them to review challenge and agree 
the risk proﬁle for their area of responsibility 
and to ensure resource is allocated effectively 
to manage risk and maximise opportunities
group risk management consolidates the risk 
information on a sixmonthly basis to create 
the group risk proﬁle and reports this to the 
grmc chaired by the chief executive which 
monitors the ongoing status of key risks to 
ensure that the progression of key action 
plans is in line with the group’s risk appetite
in addition the effectiveness of the risk 
management process is monitored by the 
audit committee through its review of audits 
undertaken by group audit services and 
reports provided by the group risk manager
our approach
whilst the ultimate responsibility for risk 
rests with the board effective daytoday 
management of risk resides within the 
business the board has delegated authority 
to the group risk management committee 
grmc a committee of the group 
management board gmb to provide an 
oversight of the framework for managing risk 
throughout the group and to ensure the 
most signiﬁcant risks to the group are 
identiﬁed and mitigated accordingly all key 
areas of the business adopt the group’s 
uniform enterprisewide risk management 
erm approach the output of which is used 
to inform decisions on the group’s strategy 
risks are considered in the context of
• longer term strategic and emerging threats 
• medium term challenges associated with 
business change programmes 
• shorter term risks triggered by changes in the 
external and regulatory environment
• shorter term risks in relation to internal 
operations and control
see risk aide memoire below
 
economic conditions 
spending on travel and tourism is 
discretionary and price sensitive the 
economic outlook remains uncertain with 
different markets at different points in the 
recovery cycle consumers are also waiting 
longer to book their trips in order to assess 
their ﬁnancial situation
“we are pleased with our robust performance in 
2011 and have delivered another year of proﬁt 
growth against a backdrop of unrest in key north 
african destinations and weak consumer sentiment 
in some source markets these achievements  
reﬂect the strength of our strategy to increase 
differentiated and exclusive product sales increase 
controlled distribution with a focus on online to 
enhance customer access and reduce distribution 
costs and the delivery of our turnaround and cost 
efﬁciency programmes” – see page 2 of preliminary 
results announcement dated 5 december 2011
risk
sustained decline in consumers’ propensity to 
travel continuation of later booking patterns 
inability to respond to short term changes in 
consumer demand
potential impact 
lower short term growth rates and reduced 
margins
strategic initiative
• product
• distribution
• operational efﬁciency
mitigation
• enhance the portfolio of products within the 
mainstream sector that increase competitive 
advantage command a premium margin and 
attract greater customer loyalty
• optimisation of the business model ensuring 
the ﬂexibility to reduce capacity in order to 
protect margins
• manage actively capacity through use of 
sophisticated capacity and yield management 
systems to improve efﬁciency and drive 
margin improvements
• continue to drive controlled distribution 
strategy which provides customers with 
greater access to lower costs and value  
for money
future developments
the grmc will continue to drive a consistent 
‘tone at the top’ and will ensure this is 
cascaded and monitored effectively in order 
that risks are managed appropriately and 
through this the group’s overall business 
performance enhanced this will also support 
the rollout of the coso control framework
the grmc has approved plans to enhance 
the group’s erm approach through a closer 
focus on gross and target risk this will 
improve the visibility of and accountability 
for controls on which reliance is being placed 
to achieve the current net risk position  
this will also improve the visibility of and 
accountability for mitigation on which 
reliance is being placed to achieve the 
targeted risk position group risk 
management will also support the business 
in developing a greater scrutiny of risks 
associated with the delivery of key growth 
plans and those associated with routine but 
critical activities 
these changes will be supported by the 
implementation of a ﬂexible integrated 
webbased risk and control solution that  
will assist the businesses to record assess 
control manage and monitor their risks the 
system is expected to be launched during  
the new ﬁnancial year upon successful 
completion of customisations required to 
align full functionality and reporting to the 
group’s erm process and requirements
principal risk table
the following table contains information 
relating to the group’s principal risks and  
key mitigating activities either in place or 
underway to manage them the ordering 
does not seek to provide an indication of  
the relative signiﬁcance of the risks nor is it  
a complete list of all risks to which the group 
is exposed those contained are currently 
deemed to be of key concern and have been 
subject to debate at recent grmc and audit 
committee meetings
political volatility natural 
catastrophes outbreaks
providers of holiday and travel services are 
exposed to the inherent risk of domestic 
andor international incidents affecting 
some of the countriesdestinations within 
its operations
“we have a clear strategy and road map for 
delivering our strategic growth initiatives as 
trading in the new ﬁnancial year progresses  
it is apparent that customers in some source 
markets are booking later than usual and that the 
recovery in demand for north african destinations 
will be slow for some considerable time we have 
adjusted our winter capacities to reﬂect the current 
market conditions and are trading in line with our 
expectations summer capacities will be ﬂexed to 
match proﬁtable demand” – see chief executive’s 
statement on page 9 
risk
large scale events causing operational disruption 
future reduction in destination desirability 
inability to operate efﬁciently
potential impact
signiﬁcant losses holiday cancellations repatriation 
of customers and decline in consumer demand 
possible increase in insurance premiums
strategic initiative
• product
• operational efﬁciency
mitigation
• ensure a balanced destination mix to 
minimise concentration and introduce ﬂexible 
supplier agreements to allow for capacity to 
be switched if required
• minimise the impact of any negative events 
through the effective execution of 
established incident management policy and 
utilisation of experienced leadership teams to 
support and repatriate stranded customers 
• promote the beneﬁts of travelling with a 
recognised and leading tour operator to 
increase consumer conﬁdence throughout 
source markets
• monitor actively the political situation in 
volatile destinations and act upon security 
intelligence advice
• maintain strong relationships with local 
tourism bodies and travel industry 
associations and ensure government 
guidance is obtained and used as required
• liaise with aviation industry stakeholders  
and meteorology service providers to ensure 
efﬁcient emergency response plans in the 
event of adverse weather conditions
successful management of risk is critical to the delivery of our objectives our framework strives continually 
to improve operational performance reduce losses and create superior shareholder value in the pursuit of the 
group’s strategic goals 
understand
market
adapt
strategy
manage
change
control and
monitor
internal
leadership
and structure
change
management
resource
and skills
t echnology
change
process
effectiveness integration and
synergy delivery
employee
relations
economic
environment
natural
catastrophes
geopolitical
events
legal action
litigation
fuel and
fx hedging
counterparty
risk
competition
compliance
t axation
differentiated
product
sustainable
development
controlled
distribution
efficiency
improvements
t echnology
innovation
consumer
behaviour
data security
completeness
and accuracy
customer
satisfaction
recruitment
and retention
health
and safety
business interruption
reliability
t alent
management
reporting
and control
budgeting
and forecasting
liquidity and
cash management
external and
regulatory
internal
operations
strategic and
emerging
business
change
changing
new
stable
known
external
the
enterprise
risk aide memoire
key areas of focus
with a common structure and process for 
erm now established the grmc recognises 
the opportunity to continue to leverage this 
investment and drive better value from it it 
intends to enhance risk competencies across 
the group and develop a culture whereby 
risk management becomes a routine way of 
working from planning and strategy setting 
through to daily operations
individual members of the grmc have  
taken ownership for speciﬁc risks on the 
group risk proﬁle and are responsible for 
developing appropriate mitigation and 
response plans to reduce the likelihood and 
impact of risks within the group’s control 
and to limit and contain the impact of those 
outside its control these in turn are 
communicated to the wider business to 
implement in order to ensure risks are 
managed to within acceptable levels wwwtuitravelplccom wwwtuitravelplccom
22 tui travel plc annual report  accounts 2011 tui travel plc annual report  accounts 2011 23
group at a glance strategic overview business and ﬁnancial review governance financial statements shareholder information
strategic overview
 
talent management 
the group’s success depends on its ability 
to retain key management and it relies on 
having good relations with its employees
“we believe that engaged and happy colleagues  
are key to both superior customer service and the 
group’s continued success and proﬁtability with 
people who believe in our products and services 
and the right approach we will continue to be our 
customers’ automatic choice for leisure travel”  
– see people on page 24
risk 
inability to attract new and retain key managers 
and personnel difﬁculty transferring talent within 
a diverse and international business failure to 
build future leadership capability 
potential impact 
adverse effect on the business operating results 
and ﬁnancial performance of the group
strategic initiative
• operational efﬁciency
mitigation
• continue to focus on current capability needs 
and gain insight in to future skills required
• ensure succession plans in place for all 
identiﬁed business critical roles in particular 
emergency successors for all sector board 
roles 
• review succession plans every six months 
• introduced groupwide initiatives to develop 
talent and ensure continued investment in 
international and tailored graduate 
programmes
• implemented a groupwide leadership 
framework to be used for development  
and recruitment of all senior roles 
emerging markets acquisitions 
and investments
the group continues to look into new 
markets as the traditional mainstream 
markets mature niche businesses and the 
bric countries represent a signiﬁcant 
opportunity to participate in longer term 
travel growth trends and have higher 
growth potential
“we believe the bric brazil russia india and 
china economies with high growth forecasts  
will be the key driver of long term travel growth  
tui travel already has a presence in russia  
and ukraine which we plan to increase from the 
existing platform and we continue to determine  
our participation strategy in brazil india and 
china” – see market overview on pages 12 to 13
risk 
inability to identify appropriate opportunities 
failure of acquisitions to deliver expectations 
limited experience in new markets possible 
difﬁculty in integrating operations and systems
potential impact 
potential lower long term growth and reduced 
margins impact on anticipated cash ﬂows 
signiﬁcant diversion of management time
strategic initiative
• product
• operational efﬁciency
mitigation
• established a signiﬁcant presence in the  
fast growing russian and ukrainian markets
• investigate opportunities to build on existing 
presence in brazil china and india supported 
by signiﬁcant market research
• completed a number of successful 
acquisitions within the specialist  activity 
and accommodation  destinations sectors 
during 201011 
business improvement 
opportunities
the group is heavily reliant on legacy 
systems processes and structures which 
in some cases are outdated complex  
and inefﬁcient 
“we remain focused on our strategy to increase 
differentiated and exclusive product sales increase 
controlled distribution with a focus on online to 
enhance our customer access and reduce distribution 
costs and our delivery of our business improvement 
programme we have selfhelp measures in place to 
help offset the difﬁcult macroeconomic environment 
in addition we continue to strengthen our cash  
ﬂow in order to fund the dividend and growth”  
– see chief executive’s statement on page 9
risk 
weaknesses or inefﬁciencies in it and ﬁnancial 
control processes misreporting of ﬁnancial 
results inefﬁcient cost structures failure in 
systems causing operational disruption
potential impact 
higher costs due to inefﬁciencies failure to 
optimise business performance impact on 
daytoday loss of revenue
strategic initiative
• distribution
• operational efﬁciency
mitigation
• continue to deliver cost savings and 
efﬁciencies through the implementation  
of the business improvement programme
• implement strategy and growth plan in german 
mainstream focusing on differentiated and 
exclusive products integration of online and 
ofﬂine businesses and back ofﬁce 
restructuring initiatives already underway  
to replace outdated it systems
• transform business processes used to create 
book and process holiday products within the 
uk business through replacement of core  
it systems 
• consolidate tour operator businesses in 
french mainstream to create a single 
business with a long term viable future
• reposition french airline as scheduled  
carrier specialising in long haul through 
delivery of corsairﬂy transformation project 
• improve cost efﬁciency in the group’s airline 
operations
• embed a coso control framework in the uk 
 ireland to strengthen ﬁnancial controls as 
part of an initiative to implement a 
groupwide coso compliance framework
• continue to implement business continuity 
management across the group to improve 
capability and reduce exposure
• drive efﬁciencies through the coordination of 
key procurement activities across the group
• review key service providers to assess 
ﬁnancial standing and levels of hs quality 
and sustainability standards
• minimise levels of prepayments to hoteliers 
and other third party service providers
 
regulatory environment
industries in which the group operates are 
highly regulated particularly in relation to 
consumer protection aviation and the 
environment 
“we work with national governments and the  
eu to ensure that our position is understood and 
respected and our opinion remains that a level 
playing ﬁeld across the industry is a necessary 
requirement to allow good companies to ﬂourish” 
– see chief executive’s statement on page 9
risk
failure in safety due diligence processes 
noncompliance to applicable regulations 
negative perception of product offering due to 
increased costs andor increase in awareness  
of environmental issues 
potential impact 
harm or injury to customers and oremployees 
limitations on operational ﬂexibility possible 
exposure to legal or regulatory sanctions associated 
reputational damage and increased costs
strategic initiative
• product
• operational efﬁciency
mitigation
• address issues affecting the industry and  
its customers through utilisation of skilled 
public affairs team working closely with 
governments and regulators 
• develop more sustainable holidays by 
reducing the environmental impact at each 
stage of the customer’s journey supported by 
experienced sustainable development team 
working closely with business management 
see sustainable development on page 28
• deliver the carbon management strategy 
which has a commitment to reducing tui 
travel’s airlines’ per passenger carbon 
emissions by 6 by 201314 against a 
baseline of 200708 – see sustainable 
development on page 28
• submitted tui travel’s 2010 airline data 
which has been externally veriﬁed by pwc  
to relevant authorities in preparation for  
the eu emission trading scheme applicable 
from january 2012 – see sustainable 
development on page 28
• introduced a new decentralised responsibility 
for health  safety hs management 
enabling sectors to focus on speciﬁc risks  
in the context of bespoke operating and  
legal environments
• continue to raise awareness of and 
compliance with the provisions of the  
bribery act 2010
 
global ﬁnancial factors 
crossborder element of trading exposes 
the business to ﬂuctuations in exchange 
rates and complex and technical tax laws a 
signiﬁcant proportion of operating expenses 
are in relation to aircraft fuel which is also 
unstable pressure on the banking industry 
is set to continue due to the eurozone debt 
crisis and the introduction of basel iii
“we have hedged the majority of our fuel and 
currency requirements for the seasons currently  
on sale” – see page 4 of preliminary results 
announcement dated 5 december 2011
“we continue to focus on cash performance and 
ended the year with a net cash position of £4m 
2010 net debt of £249m we have a number of 
cash management initiatives across the group and 
the improvement in working capital as a result of 
these initiatives has helped us to end the year in a 
net cash position” – see chief executive’s statement 
on page 9
risk
volatility of exchange rates and fuel prices may 
have a negative impact on unhedged balances 
rising input costs could increase cost of product 
offering and leave the group competitively 
disadvantaged increase in tax authorities taking 
more frequent and intrusive tax audits of the 
group’s business operations lack of available 
funding to secure additional facilities if needed 
and at a reasonable cost
potential impact
reduced demand due to increased costs  
reduced margins negative impact on cash  
ﬂow lengthy tax litigation processes possible 
reduction in group’s after tax earnings increased 
cost of borrowing
strategic initiative
• operational efﬁciency
mitigation
• ensure hedging cover is taken out ahead of 
customer booking proﬁles in order to provide 
certainty of input costs prior to pricing
• monitor the appropriateness of the group’s 
hedging policies in relation to fuel and  
foreign currency
• track closely the foreign exchange and fuel 
markets to ensure possession of most up  
to date market intelligence
• minimise uncertainty through recording of 
provisions to reﬂect potential tax exposures
• develop and maintain high quality relationships 
with tax authorities including communication 
of the group’s business operations
• ensure key facilities are reﬁnanced well ahead 
of maturity the group’s key bank facilities 
were reﬁnanced in may 2011 by a new 
£1155m revolving credit facility committed 
until 2015
• monitor actively compliance with the covenants 
contained within the group’s ﬁnancing facilities
• develop and maintain high quality 
relationships with the group’s key ﬁnanciers
consumer preferences  
and demands
consumers are increasingly turning online 
to research and book holidays social 
media price and product play a key part  
in the decisionmaking process customers 
are increasingly booking holidays nearer 
the time of travel
“we continue to differentiate ourselves by  
offering a greater choice of unique products and 
destinations as well as looking to new markets for 
growth” – see market overview on pages 12 to 13
“we remain focused in our efforts to provide  
our customers with easytoaccess information 
combined with easytouse booking engines”  
– see market overview on pages 12 to 13
risk 
failure to anticipate changes in consumer 
preferences inability to keep up with latest 
technological developments difﬁculty to  
engage efﬁciently in seasonal planning
potential impact
market positions come under pressure  
lower short to medium term growth rates 
reduced margins
strategic initiative
• product
• distribution
• operational efﬁciency
mitigation
• enhance the portfolio of products within 
mainstream sector that increase competitive 
advantage command a premium margin and 
attract greater customer loyalty
• increase hotel inventory within 
accommodation  destinations sector  
as a major growth driver for online 
accommodation business 
• consolidate the market leading positions in 
specialist  activity sector and continue to 
look for innovative products and attractive 
markets for future growth
• appointed a director of online for the 
mainstream sector
• leverage new technologies in order to 
compete with key industry players
• focus on online presence increase 
participation in social media and move 
towards an online driven company culture
• implement a tailored distribution strategy 
within each source market to meet different 
customer preferences and market dynamics
strategic overview
principal risks continued strategic overview
wwwtuitravelplccom wwwtuitravelplccom
24 tui travel plc annual report  accounts 2011 tui travel plc annual report  accounts 2011 25
group at a glance strategic overview business and ﬁnancial review governance financial statements shareholder information
our team
as at 4 december 2011
1 peter long
chief executive
2 william waggott
chief financial ofﬁcer
3 johan lundgren
deputy chief executive
4 dr volker böttcher
managing director central europe
5 bart brackx
managing director western europe
6 john wimbleton
managing director specialist  activity 
7 joan vilà
managing director  
accommodation  destinations 
8 andrew john
group legal director and  
company secretary
9 jacky simmonds
group human resources director
• 96 are personally motivated to help tui travel 
be successful
• 95 understand how their contribution 
inﬂuences tui travel
• 93 agree that in their sector they have the 
freedom to constantly ﬁnd ways to improve  
their customer offering
at tui travel we value twoway communication 
and we have a signiﬁcant number of proactive 
employee forums in place to ensure we have  
an ongoing dialogue and involve colleagues  
with matters that are important to them  
this is facilitated through elected employee 
representatives and directly in team meetings  
and larger brieﬁngs
people plans key to our strategy  
and success
the breadth of our organisation brings with it 
exciting opportunities for career progression both 
nationally and internationally attracting retaining 
and developing talent is vital to our strategy and 
success members of the gmb meet regularly  
to focus on the group’s current capability needs 
and to gain an insight into future skills which  
will be required within the group this involves 
discussing current senior vacancies and potential 
candidates as well as undertaking regular reviews 
of succession plans
as part of this work a leadership framework 
speciﬁcally highlighting what we are looking for  
in our leaders has been produced and this will be 
used for recruitment and development of all senior 
roles in the future
involvement and communication
we have engaged colleagues with great ideas at tui 
travel and we always strive to involve our people 
with matters impacting them over two thirds of 
our businesses receive feedback through employee 
opinion surveys and we are working towards 
ensuring this is even more aligned across the group 
in the future employee survey ﬁndings form an 
important strategic tool for our board and leaders 
it ensures that they are provided with honest 
feedback that can drive business improvements
during the ﬁrst half of 2011 we conducted the 
third leadership voice survey since 2008 our aim 
was to elicit the views of our core senior managers 
and over 300 leaders were invited to participate  
in doing this we are able to track progress since 
previous surveys and benchmark how we are  
doing compared to other external organisations
compared with the results in 2009 we were 
delighted to see a signiﬁcant improvement in how 
we collaborate across our businesses most of our 
leaders believe that the group structure facilitates 
sharing of best practice and believe their particular 
sector provides clear accountabilities in six out of 
seven survey categories our results were above or 
on par with the global senior management norm 
as independently veriﬁed by our external supplier
some of the highlights from the survey tell us that 
we have a committed and focused leadership team 
some highlights are
• 97 are willing to work over and above what is 
normally expected to help tui travel succeed
• 96 fully support tui travel´s values 
we believe that engaged and happy colleagues  
are key to both superior customer service and the 
group’s continued success and proﬁtability with 
people who believe in our products and services 
and the right approach we will continue to be our 
customers’ automatic choice for leisure travel
a diverse organisation
the result of such a large and global workforce  
is that by its very nature it is incredibly diverse  
we see strength in this only with the input from 
our varied and inspiring people can we continue to 
innovate and deliver we are very clear about the 
fact that we do not tolerate discrimination on any 
grounds and our ethos is that opportunities should 
be equally available to everyone we have principles 
and guidelines in place both on a grouplevel and 
more locally to actively support this
we give full and fair consideration to applications 
for employment from applicants who may be 
disabled and wherever possible continue to 
employ colleagues who have become disabled 
ensuring they have equal access to development 
and career opportunities
our top 250 senior leaders continue to illustrate 
the diverse nature of our group over a quarter  
are female and members are based in 25 different 
countries around the world of the group’s total 
workforce 42 of managers are female the board 
has resolved to adopt a policy designed to achieve 
at least 25 female representation among its 
members by 2015 and we are working towards 
making this happen
group management board 
the strategic direction of the group is set by the 
group management board gmb in conjunction 
with the board see page 46 the gmb consists  
of tour operating and function experts drawn  
from across the group this highly experienced 
international team manages and executes tui 
travel’s daytoday operations and is responsible 
for the overall performance of the group
during the year and post year end there have  
been changes paul bowtell stepped down from  
the gmb and board with effect from 31 december 
2010 post the year end on 20 october 2011 johan 
lundgren previously managing director northern 
region was appointed deputy chief executive with 
overall responsibility for the mainstream sector
the tui spirit
we are one of the world’s leading leisure travel 
groups and have a large workforce of more than 
53000 colleagues across the group we have 
shared values that are embedded in all aspects  
of working life at tui travel whilst the group is 
varied and consists of brands and businesses of  
all sizes and from all over the world our people  
all share the same core beliefs that help drive  
our business forward our four values customer 
obsessed playing to win value driven and 
responsible leadership continue to underpin  
our strategy and help us achieve the group’s  
vision of making travel experiences special
strategic overview
people
1 7
4 9
2 8
5
3
6 wwwtuitravelplccom wwwtuitravelplccom
26 tui travel plc annual report  accounts 2011 tui travel plc annual report  accounts 2011 27
group at a glance strategic overview business and ﬁnancial review governance financial statements shareholder information
for the development and implementation of the uk 
 ireland mainstream safety management system 
the specialist third party provider undertakes 
audits of overseas accommodation transport  
and excursion suppliers utilising a mix of physical 
visits and selfassessments where high risk areas 
are identiﬁed specialist intervention may be 
commissioned such as for example the deployment 
of specialist food water or hygiene consultants
hs is a standing agenda item at the monthly  
uk  ireland board meetings the distribution  
customer director reports directly to the uk  
ireland board in respect of hs and is responsible 
for implementing all necessary actions on its behalf
the specialist  activity sector operates a 
sectorspeciﬁc hs function the sector’s hs 
team comprises 14 staff based in the uk and 
overseas audits of suppliers are undertaken 
utilising a mix of physical inspections and the use of 
supplier selfassessments by means of ‘sure2care’ 
– the inhouse webbased due diligence system
each business within the sector is ‘risk proﬁled’  
and appropriate safety management systems are 
devised and implemented according to the risks 
identiﬁed within each business the proﬁle of each 
business is amalgamated into a divisional risk 
summary – the results of which are presented  
to the sector board on a regular basis
additionally a growing number of businesses also 
comply with safety management requirements set 
by external accreditation bodies such as schools 
travel forum learning outside the classroom 
british activity holiday association and british 
standard for adventurous activities outside the  
uk bs8848
in the accommodation  destinations sector  
hs is managed by each individual division and 
business hotelbeds actively pursues the collection 
of hs data on hotels by means of the sure2care 
due diligence system
intercruises has a dedicated hs manager  
who is responsible for the implementation and 
development of intercruises’ safety management 
system the operations of suppliers of services 
which are part of the core intercruises business  
for example accommodation transport and 
excursions are assessed by physical inspections 
and in the case of accommodation by means of 
the sure2care inhouse due diligence system
tui travel attaches great importance to the health 
 safety hs of its customers and employees at 
all levels of the business andrew john the group 
legal director  company secretary continues to 
be the group management board gmb member 
with delegated responsibility on hs matters 
reporting to the gmb 
in april 2011 following a review of hs processes 
tui travel decided to discontinue the group hs 
department and decentralise responsibility for 
hs management enabling sectors to focus on 
their speciﬁc risks in the context of their bespoke 
operating and legal environments 
sectors and the divisions and businesses within 
them continue to liaise cooperate and share best 
practice with the overall direction continuing to be 
founded on the tui travel hs policy statement 
issued and signed by the chief executive peter long 
employee safety
as the group continues to expand into new areas 
the nature of hazards faced by employees changes 
the likelihood and impact of these hazards needs 
to be continually assessed and mitigating measures 
put in place as appropriate hazards range from 
relatively low risk ofﬁce to the higher risk airline 
engineering environments 
a programme of workplace risk assessment continues 
to be undertaken highlighting any areas of concern 
where signiﬁcant risk exists the assessments are 
used to understand better the various hazards 
involved and identify and implement appropriate 
mitigating measures safety management systems 
continue to be developed and improved by 
individual businesses with assistance from the 
relevant sector and divisional hs professionals
the group hs induction programme ‘safety in 
your workplace’ continues to provide employees 
with the relevant hs knowledge for their workplace
within the uk any relevant injuries diseases or 
dangerous occurrences are reported under the 
reporting of injuries diseases and dangerous 
occurrences regulations riddor the incidents 
statistics for the uk for 201011 are given below
local and national authorities continue to visit 
various group premises offering advice and 
highlighting relevant issues no enforcement 
notices or convictions have occurred within the 
201011 ﬁnancial year
customer safety
each of the sectors has responsibility for ensuring 
that sound hs practices and robust safety 
management systems are embedded within their 
businesses 
in mainstream the uk  ireland business has 
outsourced certain of its hs activities to a 
specialist external third party provider the  
third party provider is instructed and monitored  
by a ukbased team which sets the hs strategy 
agrees the audit schedule and takes responsibility 
strategic overview
health  safety
strategic overview
people continued
attracting and nurturing young talent
we continue to invest in attracting young graduates 
for both international roles and local source 
markets the international management graduate 
programme is an 18month experience which is 
open to outstanding and multilingual graduates 
from around the world giving them unique 
exposure within tui travel once in the 
programme they have the choice of a variety of 
assignments throughout the group which will help 
develop their skills and experience this year we 
have had an intake of eight international graduates
we also have tailored graduate programmes in 
place at a sector and business level such as those 
within tui uk  ireland tui deutschland and  
the specialist  activity sector all are designed  
to attract and nurture new talent to create tui 
travel’s leaders of the future 
in addition within these larger sectors and 
businesses our approach is to support young 
people in gaining valuable work experience through 
apprenticeships and we support many colleagues in 
gaining qualiﬁcations relevant to their role these 
are important ways to nurture talent and invest in 
our people 
leadership capability development
we have a number of groupwide initiatives in 
place to develop our talent horizons is an internal 
leadership programme aimed to develop potential 
future international leaders at tui travel the 
successful programme focuses on developing 
leadership skills but also gives participants a 
broader understanding of the business areas within 
the group the end result is sound leadership skills 
an excellent understanding of our business and an 
ability to inﬂuence business strategy at the highest 
level many of those attending the programme have 
been given the chance to further their careers and 
we have seen a number of individuals promoted 
across the group
another exciting programme is the global 
responsible leadership programme which has 
most recently been taking place in thailand the 
aim is for selected leaders of tui travel to gain 
further insight into their leadership styles and build 
contacts across the group whilst at the same time 
making a contribution to a local community the 
programme is closely aligned to our sustainable 
development agenda and during the sixday 
programme delegates have the opportunity to 
explore their leadership styles and work with a 
diverse group of nationalities as well as helping a 
local community with building projects and school 
activities and providing advice to local businesses 
the programme not only develops leadership skills 
by taking people out of their comfort zone but also 
enables them to appreciate that local businesses 
may have different views on how success can be 
achieved in this way leaders develop empathy  
and recognition of the need to adapt their style for 
different cultural settings it is a great opportunity 
for colleagues to develop as leaders and is also a 
chance for us to give something back to a community 
in one of the countries where we operate
a signiﬁcant amount of capability development also 
takes place locally in our sectors and businesses 
where initiatives are tailored to meet the needs of 
their teams this includes the successful ‘essence 
of leadership’ programme for senior leaders in  
the accommodation  destinations sector and 
signiﬁcant amounts of training hours delivered  
in other sectors and businesses utilising both 
inhouse and external suppliers
incident data october 2010 to september 2011
    crawley 
  airline uk  and other 
uk incident category airline equivalent ireland businesses total
number of incidents 493  47 19 559
number of riddor over 3day incidents 19 34 6 0 59
number of riddor major incidents 2 1 0 0 3
number of riddor fatalities 0 0 0 0 0
  where an incident occurs outside of the uk it is not reportable under the riddor legislation but within the group 
incidents are reported as a ‘riddor equivalent’
  where due to an accident at work an employee is unable to perform their normal work duties for more than three 
consecutive days not including the day of the accident wwwtuitravelplccom wwwtuitravelplccom
28 tui travel plc annual report  accounts 2011 tui travel plc annual report  accounts 2011 29
group at a glance strategic overview business and ﬁnancial review governance financial statements shareholder information
strategic overview
  achieved through operational 
efﬁciencies fuel conservation capacity 
amendments as well as the emission 
reductions which occurred in 200910 
following the strategic venture with air 
berlin
  an approximate ﬁgure of group  
savings tracked gross of any upfront 
investments required to achieve those 
savings between 2008 and 2010 part  
of previously identiﬁed cost savings
  carbon footprint covers scope 1 and 2 
data only scope 1 – greenhouse gas 
emissions arising from sources owned 
or controlled by an organisation scope 
2 – greenhouse gas emissions which do 
not physically occur from within the 
organisation’s reporting boundary and 
are therefore ‘indirect’ emissions
key achievements in 201011 include
• circa £16m cost savings realised via environmental 
initiatives between 2008 and 2010
• 2010 airline data externally veriﬁed by pwc  
and submitted to the relevant authorities in 
preparation for the eu emission trading scheme
• co
2
 per revenue passenger kilometre across 
tui travel airlines in 201011 of 759g an 
improvement of 26 since 200708 – making  
us one of the most efﬁcient airlines in europe 
and beyond 
• thomson airways was the ﬁrst uk airline to achieve 
iso 14001 certiﬁcation for its engineering operations
• on 6 october 2011 thomson airways became 
the ﬁrst uk airline to ﬂy customers on 
sustainable biofuel 
• le boat introduced a ﬂeet of environmentally
friendly vessels in 2011 – allowing cruising under 
solargenerated electric power
• two of tui deutschland’s river cruises achieved 
green globe certiﬁcation the ﬁrst in the world 
to achieve the new cruise standard and 
thomson cruises trialled the travelife 
sustainability system on board
• tui nordic has replaced the majority of overseas 
employees’ cars with ecovehicles 130g co
2

km in destinations across europe and turkey
• tui nederland built a new head ofﬁce to breeam 
excellent standard a rating for green buildings
• tui travel scored in the top 20 of the uk’s 2011 
carbon reduction commitment energy efﬁciency 
scheme performance league table this recognises 
tui uk’s commitment to measuring managing 
and reducing its carbon emissions through the 
carbon trust standard and rolling out automatic 
meter readers across the retail estate to 
improve daytoday energy management
in 201011 the carbon emissions from tui travel 
airlines accounted for 919 of its carbon footprint 
we have developed collaborative partnerships with 
many stakeholders whose insight and guidance is 
helping us to develop our position on aviation and 
climate change examples include forum for the 
future eu cleansky project uk sustainable aviation 
and sustainable aviation fuel users group
managing sustainable development
this year the group has enhanced its governance 
structure for sustainable development jane ashton 
has been appointed director of group sustainable 
development jacky simmonds group hr director 
now has responsibility for reporting on sustainable 
development to the group management board gmb 
and johan lundgren deputy chief executive  
is responsible for reporting on sustainable 
development to the tui travel plc board 
the gmb acts as the steering committee and  
sets the group’s strategic direction and long term 
objectives for sustainable development
the group sustainable development department’s 
role is to drive change towards a more sustainable 
company and to forge sector leadership our 
groupwide work streams meet regularly to tackle 
issues and develop programmes of work each 
sector within the group has a sustainable 
development coordinator or team with a remit to 
develop and implement sustainable development 
strategy supported by a network of champions 
to review performance and to measure progress 
we have incorporated sustainable development 
questions into regular employee surveys at  
sector and group level and we conduct an  
annual sustainable development evaluation  
of tui travel tour operating businesses as well  
as speciﬁc surveys of airlines hotels and water 
transport operations
carbon management 
travel and tourism are responsible for around  
5 of global co
2
 emissions unwto 2007 as a 
leading tour operator our challenge is to prepare 
for a lowcarbon society by further reducing our 
environmental impacts three years ago tui travel 
airlines set a target to reduce carbon emissions  
by 6 by 201314 against a baseline of 200708 
both on a total and on a relative basis in 201011 
tui travel airlines’ total carbon emissions were 
5467814 tonnes ie 9 less than in 200708 
whilst our relative carbon emissions in 201011 
were 759g per revenue passenger kilometre  
co
2
rpk ie 26 less than 200708 we will 
continue to work towards achieving our 6  
relative reduction target by 201314
tui travel has a carbon management strategy  
in place covering aviation water transport major 
premises ground transport and ﬂagship hotel 
properties we are monitoring and preparing  
for regulatory proposals on climate change  
that could have a ﬁscal impact 
our sustainable development goal is to minimise 
our environmental impact respect the culture and 
people in our destinations and offer real economic 
beneﬁt to local communities 
sustainability is regarded as a serious business 
issue across tui travel where it is an integral part 
of business processes supplier operating standards 
and performance metrics for many of our brands 
we have already experienced a range of business 
beneﬁts including cost efﬁciencies quality 
improvements and the enhanced engagement  
of customers colleagues and suppliers 
in 201011 we were pleased that our performance 
was recognised as follows
• for the fourth consecutive year tui travel was 
featured in the carbon disclosure leadership 
index and was in the top 10 of the ftse 350 
for its approach to carbon disclosure and 
performance and ranked in the top seven for 
carbon performance in the gics consumer 
discretionary sector covering global 500  
sp 500 and ftse 350 wwwcdprojectnet 
• tui travel continues to be listed on the 
ftse4good index in recognition of its 
transparency and for meeting strict social 
environmental and governance standards 
• tui travel was featured in the 2011 dow jones 
sustainability year book which features the  
best performing 15 of companies who submit 
data to the index in each industry sector  
wwwsamgroupcomyearbook
• tui travel completed its second submission  
to the forest footprint disclosure project in 
2011 and was one of eight companies listed  
in the travel and leisure sector in 2010  
wwwforestdisclosurecom
for further details on awards and our  
latest sustainable development report see  
httpwwwtuitravelplccomsustainability 
sustainable development strategy 
tui travel’s sustainable development strategy  
is based on consideration of the key issues 
affecting the company now and in the future it  
is regularly reviewed in consultation with internal 
and external stakeholders our four strategic 
priorities for sustainable development align with 
tui travel’s strategy 
we encourage all tui travel businesses to  
develop their own strategies aligning with group 
and sector priorities and the related targets  
where appropriate 
strategic overview
sustainable development
carbon management
goal to reduce tui travel’s airlines’ per 
passenger carbon emissions by 6 by 
201314 against a baseline of 200708
destinations
supplier management goal all suppliers  
in each destination follow sustainability 
practices and have continuous improvement 
programmes in place
destination projects goal tui travel  
working with partners will make measurable 
improvements to local livelihoods and 
environmental protection in destinations
our colleagues
goal tui travel colleagues are engaged and 
empowered to take action on sustainability 
for the future success of the company
our customers
goal tui travel businesses deliver quality 
communications designed to raise customer 
interest and demand for sustainable holidays
our four strategic priorities for 
sustainable development are
pioneer partner
tui travel plc works with 
forum for the future a uk 
sustainable development ngo 
forum for the future selects  
a handful of companies as 
‘pioneer’ partners deﬁned as 
leading organisations at the 
cutting edge of sustainability 
tui travel has been selected  
as one of these partners
protecting forests in kenya
tui travel supports a project in 
kasigau wildlife corridor kenya 
which is preserving 75000 acres 
of dry forest under threat from 
agriculture and charcoal 
production the project provides 
alternative livelihoods for locals 
for example as game wardens  
in sustainable charcoal making 
and at a clothing factory it is the 
world’s ﬁrst project to be issued 
with reduced emissions from 
deforestation  degradation 
redd credits 
tui travel airlines and aviation
water transport
ground transport
premises
flagship hotel properties
 
919
42
07 07
25
breakdown of tui travel’s carbon footprint in 201011 strategic overview
wwwtuitravelplccom wwwtuitravelplccom
30 tui travel plc annual report  accounts 2011 tui travel plc annual report  accounts 2011 31
group at a glance strategic overview business and ﬁnancial review governance financial statements shareholder information
strategic overview
sustainable development continued
our customers 
across the business we have been proactive in 
raising awareness of sustainability issues with our 
customers to achieve many of our goals we need 
customers’ support both through the purchases 
they make and the personal actions they take we 
are working to raise awareness inﬂuence choice 
change behaviour and develop and promote new 
products to encourage responsible holiday choices
key achievements for 201011 include
• launch of the internal sustainability customer 
communication awards – encouraging 
businesses to showcase best practice in this area
• over 300000 parents teachers and children 
were engaged in sustainable tourism through the 
uk schools’ ecotraveller programme teaching 
children how they could make a difference on 
holiday developed by tui uk in collaboration 
with the national schools partnership
• tui deutschland and tui uk  ireland are  
now including carbon emission information on 
the ﬂight element of the holiday in customer 
communication
• commissioning of the sustainable holiday 
futures report showing how travel will have to 
change in order to save the world’s dwindling 
resources
• analysis from tui uk  ireland’s summer 2010 
customer satisfaction questionnaires revealed  
a statistically signiﬁcant correlation between 
good customer ratings on our approach to  
the ‘environment and community’ and overall 
holiday satisfaction 
tui travel businesses request feedback from 
customers regularly and some offer the 
opportunity to comment on the environmentally 
and socially responsible aspects of their holiday 
our colleagues 
our aim is to make sustainable development 
tangible to each and every colleague within the 
group we communicate regularly about the 
progress we have made on our journey towards 
securing a sustainable future for our industry and 
continue to build sustainability into our colleague 
inductions and training programmes including 
development programmes for managers 
we have a group code of conduct which covers  
a wide range of sustainability issues including 
human rights business ethics and transparency 
and commits tui travel to upholding the principles 
of the un global compact 
key achievements for 201011 include
• organisation of sustainability awarenessraising 
initiatives at head ofﬁces and overseas for 
example the accommodation  destinations 
sector held an inaugural green week hosting 
sustainability ‘lunch and learn’ sessions at their 
head ofﬁce in palma as well as activities across 
the world jetair organised a green day for 
colleagues including a carfree day and 
sustainable lunch
• colleagues within the specialist  activity  
sector are each given a day to volunteer for  
their chosen charity supporting charities such  
as the chestnut tree children’s hospice 
• volunteers at tui uk supported sustainable 
tourism projects in cyprus turkey and crete  
and launched ‘project discovery uk’ giving all 
colleagues one day a year to volunteer in the uk
• tui nederland launched a green loyalty 
programme for travel agencies including third 
party to stimulate sales of green accommodation
• tui travel’s senior management were regular 
public advocates for more sustainable tourism  
in the media at industry and governmental 
events for example senior executives presented 
at the hungarian eu presidency conference  
in budapest the 5th international conference  
on responsible tourism in destinations in 
edmonton itb berlin’s corporate social 
responsibility day and world travel market’s 
world responsible tourism day in london
we have developed a number of core questions 
relating to responsible leadership and sustainable 
development that businesses and sectors include 
in colleague opinion surveys our 2011 leadership 
voice survey conﬁrmed that
• 88 of leaders agreed that tui travel acts 
responsibly on environmental matters 
• 80 of leaders agreed that tui travel acts 
responsibly in the local communities in which  
we operate 
we also gather feedback from colleagues on 
sustainability issues through focus groups 
key achievements in 201011 include 
• initiation of a project to understand the key 
sustainability issues in three destinations 
turkey cape verde and tunisia – we are now 
planning our operational response
• commissioning of a study and report ‘measuring 
and improving the socioeconomic impact of an 
all inclusive hotel in turkey’ with the travel 
foundation and overseas development institute 
recommendations have been implemented at 
this hotel and are being replicated at other hotels
• investment in six emission reduction projects in 
key destinations which are scheduled to deliver 
in excess of 500000 tonnes of co
2
 reductions  
by the middle of 2013
• support of initiatives to help protect sea turtle 
populations in turkey and greece by many 
businesses across the group
• support of clean water projects through ‘just a 
drop’ and ‘pump aid’ in kenya bolivia uganda 
zimbabwe malawi and liberia
we are conscious of the pressures that tourism  
can place on local populations and resources and 
therefore work collaboratively with communities 
local and national governments nongovernmental 
organisations ngos and trade associations to 
support sustainable management of destinations 
and to shape our strategy in this area examples 
include dutch association of travel agents  
and tour operators deutscher reiseverband 
association of british travel agents the tour 
operators initiative global sustainable tourism 
council sustainable travel international the 
overseas development institute born free and 
the travel foundation 
charitable giving 
in the last year our businesses supported many 
source market and destination charities our 
groupwide charity policy and guidelines help 
businesses to ensure transparency report annual 
monies collected and manage charity relationships 
key achievements in 201011 include
• we are the largest corporate sponsor of the 
family holiday association a charity that provides 
holidays to disadvantaged children and their 
families since 2009 we have donated more  
than £1m wwwfhaonlineorguk 
• street child world cup has been selected as the 
specialist  activity sector’s chosen charity for 
the next three years colleagues will be involved 
in raising as much money as possible for millions 
of vulnerable children living on the streets 
around the world wwwstreetchildworldcuporg 
• many tui travel businesses support the  
travel foundation a charity which helps  
the travel industry understand manage and  
take effective action on sustainable tourism  
to date we have donated more than £28m 
wwwthetravelfoundationorguk 
destinations 
depending on how impacts are managed we  
know that the leisure travel industry can have both 
positive and negative effects on communities and 
the natural environment we are committed to 
learning more about how our holidays can beneﬁt 
local livelihoods and protect the environment – and 
are putting this into practice this is fundamental 
to preserving the quality of our product in years  
to come
supplier management
tui travel has an extensive supply chain operating 
across the world – see page 48 these businesses 
are the gatekeepers to tui travel’s sustainability 
performance in destinations by focusing on 
sustainability our suppliers are able to achieve  
cost efﬁciency savings which ultimately give 
customers better value for money our challenge  
is to extend the reach of inﬂuence to all suppliers 
and to monitor their progress 
key achievements in 201011 include 
• launch of ‘guidelines for environmental 
sustainability in hotels’ – the guidelines aim to 
help our hotel suppliers achieve best practice 
sustainability performance and highlight case 
studies where ecoefﬁciencies have saved 
suppliers signiﬁcant sums
• adoption of environmental and social contractual 
minimum standards for accommodation suppliers 
by our mainstream tour operating businesses 
and other businesses across the group
• sustainability certiﬁcations for over 700 hotels 
by the end of summer 2011
• organisation of sustainability supplier 
conferences in the canaries and london
• launch of bluecontec – a sustainability  
and energy consultancy business for tourism 
companies especially hotels – by tui 
deutschland
• incorporation of sustainability ﬂagship hotel 
standards into holiday village sensatori and  
the couples’ hotel speciﬁcation contracts in  
tui uk  ireland
• introduction of ecocotton shirts for all retail 
overseas and ﬂight crew colleagues by tui nordic
destination projects
tui travel is involved in hundreds of projects 
designed to improve the livelihoods of local people 
in destinations and to protect the environment 
holidays forever
in 201011 tui uk unveiled  
a new consumer sustainable 
tourism campaign called 
holidays forever the campaign 
brings together the company’s 
sustainability strategy under 
four ambitions supported by  
20 commitments to be achieved 
by 2014 it focuses on reducing 
carbon emissions taking care in 
destinations living our values 
and inspiring customers  
by engaging one million 
holidaymakers in sustainable 
tourism
green ofﬁce opened
tui nederland is leading the  
way by building a new ofﬁce  
with signiﬁcant environmental 
features energy consumption  
is managed using an advanced 
system that substantially 
reduces co
2
 emissions solar 
energy is generated using solar 
panels cold and heat energy  
is stored and lights only switch 
on when there is insufﬁcient 
daylight the building is certiﬁed 
to breeam excellent standard  
a rating for green buildings  
and when launched in august 
2011 it was one of the most 
environmentally friendly 
buildings in the netherlands
intrepid travel wins global 
award
intrepid travel won the global 
tourism business award at the 
2011 tourism for tomorrow 
awards the awards run by the 
world travel and tourism 
council recognise leading travel 
organisations that have gone the 
extra mile to demonstrate 
sustainable tourism best 
practices in their philosophy 
strategy and operations intrepid 
travel was recognised for the 
depth of its sustainability 
practices that span its entire 
operations
shaping lives
in 201011 le passage to india 
developed and launched ‘shaping 
lives – le passage travel 
foundation’ this initiative 
supports over 16 animal and 
child welfare projects across 
india one project took over 150 
disadvantaged children on a 
ﬂight from delhi to jaipur for a 
3day city tour wwwtuitravelplccom wwwtuitravelplccom
32 tui travel plc annual report  accounts 2011 tui travel plc annual report  accounts 2011 33
group at a glance governance financial statements shareholder information
business and ﬁnancial review
business and ﬁnancial review strategic overview
dividends
the board is recommending a ﬁnal dividend of  
80p per share 2010 78p on 10 may 2011 the 
board recommended an interim dividend of 33p 
per share 2010 32p making a full year dividend 
of 113p per share 2010 110p the ﬁnal dividend 
will be paid on 10 april 2012 to holders of relevant 
shares on the register at 9 march 2012
the group’s policy is to maintain underlying 
dividend cover at around two times we intend  
to continue to operate a dividend reinvestment 
plan as an alternative to receiving a cash dividend
cash and liquidity
the net cash position cash and cash equivalents 
less loans bonds overdrafts and ﬁnance leases  
at the year end was £4m 2010 net debt £249m 
this consisted of £902m cash and cash equivalents 
and £898m of interestbearing loans and liabilities 
the reduction in net debt was primarily driven by 
growth in underlying proﬁt together with lower 
separately disclosed items and strong working 
capital management as at 30 september 2011 
undrawn committed borrowing facilities totalled 
£1044m 2010 £984m
free cash ﬂow improved by 33 to £451m  
2010 £339m analysed as follows
£m   2011 2010
underlying operating proﬁt  
2010 pro forma   471 434
depreciation and amortisation included  
within underlying operating profit  172 207
underlying ebitda
1
   643 641
working capital movement   218 217
capital expenditure net of disposals 162 178
other   248 341
free cash ﬂow   451 339
1 earnings before interest tax depreciation and amortisation
on 30 april 2011 we completed the ﬁnal €160m 
repayment of our shareholder loan with tui ag 
we successfully reﬁnanced our banking facilities  
in may with the signing of new facilities totalling 
£1155m the new facilities have a fouryear term 
and mature in 2015 interest will be incurred at a 
margin above libor dependent on the proportion 
of the facility drawn and it is envisaged that the 
average margin will be less than 2 our covenants 
remain unchanged net debtebitda not to exceed 
3 times ﬁxed charges cover to exceed 15 times 
tested halfyearly
in addition specialist  activity made the following 
bolton acquisitions
• english language centre york which provides 
high quality language courses to students from 
44 countries
• great atlantic travel a us sports tour operator
in november specialist  activity disposed of the 
thomson al fresco business to homair vacances
in ad we acquired
• lima tours a destination management business 
which specialises in creating and operating 
innovative and high value added travel 
experiences in peru
• tms gateway the leading supplier of port 
agency and ground handling services to cruise 
ships on the us and canadian west coast
• top class a port handling company based  
in france
in central europe we acquired a number of travel 
agencies to support our strategy of increasing the 
controlled distribution mix
taxation
underlying proﬁt before tax for the year was 
£360m the effective tax rate on these proﬁts  
is 27 based on the current structure of the 
business and existing local taxation rates and 
legislation it is expected that the underlying tax 
rate will be maintained at this level the actual tax 
rate is 44 this differs to the underlying tax rate 
due to the tax effect of separately disclosed items 
principally the nonrecognition of tax losses arising 
from such items acquisition related expenses 
goodwill impairment charges and the booking of 
£17m of speciﬁc provisions against potential tax 
exposures in morocco and the uk
the cash tax rate is expected to be lower than  
the underlying income tax rate as we utilise our 
deferred tax assets generated from restructuring 
expenditure and trading losses in the coming year 
we envisage a cash tax rate of approximately 20 
of underlying proﬁt before tax
earnings per share
underlying basic earnings per share was 236p 
2010 190p basic earnings per share was 77p 
2010 loss per share 111p
a reconciliation of underlying operating proﬁt to 
statutory operating proﬁt is as follows
   2011 2010
year ended 30 september   £m £m
underlying operating proﬁt  471 399
separately disclosed items  
– operating note 4   74 255
predecessor accounting for magic life 17 19
acquisition related expenses  82 63
impairment of goodwill   39 12
interest and taxation on results  
of joint ventures and associates  4 6
statutory operating proﬁt  255 44
acquisitions and investments
the group invested £51m in acquisitions in 2011 
in july we acquired the operating companies that 
lease and manage thirteen magic life clubs for  
€6 from tui ag reﬂecting the current lossmaking 
nature of the business the transaction has helped 
us to secure exclusive access to differentiated 
content for our tour operators
in april specialist  activity entered into a strategic 
venture with intrepid travel the transaction 
combines our adventure businesses with intrepid 
to create the clear global leader in adventure travel 
the transaction was based on an injection of 
businesses into the venture by both parties and 
has no cash component the group has 60 
ownership of the combined business and fully 
consolidates its results intrepid travel’s private 
shareholders own the remaining 40 the transaction 
is expected to deliver at least £10m per annum of 
cost synergies primarily arising from increased 
economies of scale within the ﬁrst three years
group revenue was 9 higher than the prior year 
at £14687m 2010 £13514m driven by organic 
growth of 7 foreign currency translation 2 and 
acquisitions 1 these were offset by the impact  
in the ﬁrst half of the strategic transactions in 2010 
in canada and germany scheduled ﬂying which 
reduced revenue by 1
the main drivers of the year on year improvement 
in underlying operating proﬁt are
£m
2010 underlying operating proﬁt 399
nonrecurrence of volcanic ash 35
incremental synergiescost efﬁciencies 26
turnaround 42
acquisitions including magic life see note 1bii 14
trading 23
investment in accommodation  
online travel agents otas 10
provision for north african contracts 9
france tour operator 50
egypttunisia excluding france tour operator 25
fx translation 26
2011 underlying operating proﬁt 471
underlying operating proﬁt improved by £72m  
to £471m 2010 £399m this was driven by the 
delivery of £42m of incremental turnaround proﬁts 
strong performances by the uk nordic region 
belgium the netherlands canada and austria and 
by the nonrecurrence of volcanic ash disruption 
these were partially offset by the impact of unrest 
in north africa during the ﬁrst half and continued 
impact during the second half on the french tour 
operators
business and ﬁnancial review
group performance
 underlying results
1
 statutory results
  
£m 2011 2010
2
 change  2011 2010
2
revenue 14687 13514 9 14687 13514
operating proﬁt 471 399 18 255 44
proﬁtloss before tax 360 289 25 144 73
free cash ﬂow 451 339 33 451 339
basic earnings per share pence 236 190 24 77 111
dividend per share pence 113 110 3 113 110
1  underlying revenue operating proﬁt proﬁtloss before tax and eps exclude separately disclosed items amortisation of business 
combination intangibles acquisition related expenses predecessor accounting for magic life and interest and taxation of results of the 
group’s joint ventures and associates
2  prior year ﬁgures have been represented to include jet4you which was previously reported as a discontinued operation and to incorporate 
the results of magic life under predecessor accounting
william waggott
chief financial ofﬁcer wwwtuitravelplccom wwwtuitravelplccom
34 tui travel plc annual report  accounts 2011 tui travel plc annual report  accounts 2011 35
group at a glance governance financial statements shareholder information business and ﬁnancial review strategic overview
business and ﬁnancial review
group performance continued
business and ﬁnancial review
segmental performance
• the impact of predecessor accounting for magic 
life is included within the revenue ﬁgures for  
the hotels division full details are given in  
note 1bii
in addition the prior year revenue and underlying 
operating proﬁt used in the segmental analysis 
below are pro forma ﬁnancial measures before  
the estimated impact of the closures of northern 
european airspace during 2010 as a result of 
volcanic ash a reconciliation of revenue and 
underlying operating proﬁt shown above to the  
pro forma revenue and underlying operating proﬁt 
shown in this section is as follows
segmental performance is based on underlying 
ﬁnancial information which excludes certain items 
including separately disclosed items acquisition 
related expenses and predecessor accounting
as previously announced the following changes 
have been made to the prior year ﬁgures
• with effect from 1 october 2010 the group 
reorganised its business sectors with the main 
change being the merger of the specialist and 
activity sectors the segmental results for both 
the current and prior periods are presented 
under this new structure 
• previously we reported jet4you’s results  
as a discontinued operation as we expected  
to dispose of the business in the near term  
as a sale agreement has not been reached  
the prior year ﬁgures have been represented  
to include jet4you’s results full details are  
given in note 1bii
understatement of current liabilities within 
nouvelles frontières the french tour operator of 
£45m as both errors offset within cost of sales and 
trade and other payables and do not materially 
change the proﬁt net assets or overall ﬁnancial 
position of the group the prior year has not  
been restated the correction of the errors has 
been made through the proﬁt and loss account  
in the year ended 30 september 2011 we have 
addressed the underlying causes of these errors 
within the business concerned and are introducing 
a groupwide compliance framework as part of  
our ongoing work to improve key ﬁnancial controls 
and procedures
other separately disclosed items netted to nil  
a £12m impairment of one of our uk cruise ships 
island escape was offset by proﬁts on disposal  
of aircraft and engines
further information is included within note 4
pension deﬁcit
the net accounting pension deﬁcit at the year end 
was £513m 2010 £493m the cash contribution  
to fund the deﬁcit was £33m in 2011 2010 £64m 
the increase in deﬁcit reﬂects actuarial losses 
arising from a reduction in the value of scheme 
assets as a result of worsened stock market 
conditions and an increase in the value of scheme 
liabilities as a result of changes in discount rate 
assumptions these were partly offset by £63m 
reduction in the uk pension scheme liability as 
previously reported during the sixmonth period 
ended 31 march 2011 the company engaged in  
a consultation process with the members of its 
deﬁned beneﬁt pension schemes which resulted  
in a restriction to salary increases used under the 
rules of the pension schemes to calculate beneﬁts 
to a maximum of 25 in any one year this  
change resulted in a reduction in accrued pension 
liabilities measured under ias 19 of £63m with a 
corresponding credit recognised within separately 
disclosed items in the income statement 
separately disclosed items
separately disclosed items net to a £74m expense 
in the year 2010 £255m the following table 
provides a breakdown of these items
£m   2011 2010
merger related integration costs  – 116
restructuring costs   137 63
pension   63 –
incremental costs caused by  
volcanic ash disruption in 2010  7 69
aircraft and other   7 7
total separately disclosed items  74 255
restructuring costs of £137m were incurred in the 
year the largest items by division were as follows
• £35m in france in relation to the ongoing 
restructuring of the airline and retail network  
of nouvelles frontières
• £32m in germany where we announced in 
september our strategy and growth programme 
get 2015
• £19m in the uk including rationalising the retail 
distribution network
• £15m in the specialist  activity sector relating 
to back ofﬁce cost reductions
the remaining costs related primarily to 
restructuring within the ad sector and group 
head ofﬁce companies
the above costs were partly offset by a £63m 
reduction in the uk pension scheme liability 
following agreement with pension scheme 
members to cap the rate of future growth of 
pensionable pay detailed below
during the current ﬁnancial year two errors have 
been identiﬁed which relate to the balance sheet  
as at 30 september 2010 the omission of an 
elimination of surplus sundry payables from the 
group balance sheet resulted in an overstatement 
of current liabilities of £38m this was offset by an 
year ended 30 september 2010 
  northern central western specialist accommodation
£m  region europe europe  activity  destinations other total
statutory revenue  4312 4354 2920 1347 581 – 13514
impact of volcanic ash  59 21 35 4 6 – 125
pro forma revenue  4371 4375 2955 1351 587 – 13639
year ended 30 september 2010 
  northern central western specialist accommodation
£m  region europe europe  activity  destinations other total
underlying operating proﬁt  162 85 38 77 73 36 399
impact of volcanic ash  21 7 6 1 – – 35
pro forma underlying operating proﬁt  183 92 44 78 73 36 434 wwwtuitravelplccom wwwtuitravelplccom
36 tui travel plc annual report  accounts 2011 tui travel plc annual report  accounts 2011 37
group at a glance governance financial statements shareholder information
business and ﬁnancial review
business and ﬁnancial review strategic overview
environmental guidelines 
launched
tui travel launched ‘guidelines 
for environmental sustainability 
in hotels’ at a conference which 
brought together hotel general 
managers industry associations 
academics and key colleagues 
from across the group to share 
best practice the guidelines 
illustrate how hotels can reduce 
their negative impacts on the 
environment and support the 
local community while making 
ﬁnancial savings 
product differentiation at 
heart of uk strategy
tui uk  ireland continues  
to make use of its dual brand 
portfolio with thomson and first 
choice further distinctiveness 
came this year with the move of 
the first choice brand to offer 
only all inclusive holidays from 
summer 2012 this builds on the 
strength of the popular ranges 
across both brands including 
first choice holiday village and 
splash with thomson sensatori 
couples and family resorts to 
choose from customers have 
access to a range they simply 
cannot ﬁnd from any other  
tour operator 
thomson airways makes 
aviation history
thomson airways became  
the ﬁrst uk airline to operate 
commercial ﬂights on sustainable 
biofuel from used cooking oil 
when tom 7446 took off from 
birmingham airport to arrecife 
in lanzarote on 6 october 2011 
carrying 232 passengers on a 
boeing 757200 the landmark 
ﬂight which was given full 
backing by aviation minister 
theresa villiers conﬁrmed 
thomson airways’ position  
at the forefront of sustainable 
aviation the ﬂight generated  
a considerable amount of press 
coverage and has paved the way 
for daily ﬂights using sustainable 
biofuel to commence from early 
2012 for six weeks 
tui nordic drives growth 
online
during 2011 tui nordic  
stepped up its efforts to become 
onlinedriven after dispensing 
with the traditional summer  
and winter brochures the web 
is now the ‘daily brochure’ 
including a 24hour information 
channel and online shop and  
is supported by inspirational 
magazines published two  
or three times a year online 
sales have grown from 57  
to 61 with controlled 
distribution reaching 86  
as at 30 september 2011
nordic region
the nordic region achieved an improved underlying 
operating proﬁt of £70m 2010 £56m excluding 
the impact of foreign exchange translation the 
improvement versus prior year was £10m 
volume improvements were seen across most 
destinations with the canaries up 26 and 
thailand up 30 in winter the latter destination 
beneﬁting from the use of a corsair 747 in 
summer the programme was again expanded with 
greece up 17 turkey up 28 and spain up 33 
differentiated products accounted for 58 of  
the overall mix up thirteen percentage points on 
prior year two new blue villages were launched  
for summer 2011 – blue village seven seas in 
turkey formerly magic life and blue village 
alcudia pins in mallorca shared exclusively with 
thomson family
the nordic region continues to successfully 
implement its online strategy with online bookings 
accounting for 61 of the total in 2011 up four 
percentage points on prior year traditional 
brochures were not issued this year for the core 
tour operator brands fritidsresor in sweden star 
tour in norway and finnmaktat in finland instead 
customers use the website as a ’daily brochure’ 
which provides information and acts as an online 
shop as online bookings have grown the business 
has further rationalised its retail portfolio and 
therefore reduced further its distribution costs
canada
canada delivered an underlying operating proﬁt  
of £18m 2010 loss of £5m
following the completion of the joint venture  
with sunwing in january 2010 the business has 
successfully transformed itself to become a market 
leader the annualised beneﬁt of synergies airline 
efﬁciencies and back ofﬁce cost savings coupled 
with better purchasing and cost control and 
product improvements have driven the improved 
result which has exceeded expectations we now 
consider the turnaround to be complete and  
expect the business to move into a phase of 
proﬁtable growth
hotels
the hotels division comprises hotel management 
companies and joint ventures in hotel assets 
underlying operating proﬁt improved to £13m  
in 2011 2010 £5m beneﬁtting from £8m high 
season proﬁts from the magic life acquisition 
which completed at the start of the ﬁnal quarter
uk  ireland
the uk  ireland businesses delivered a £22m 
improvement in underlying operating proﬁt to 
£149m 2010 £127m we are particularly pleased 
with the performance of our differentiated 
products and with the outcome of summer trading 
which helped to offset the negative impact of 
unrest in north africa earlier in the year 
the growth of higher margin differentiated 
products has underpinned volume and margin 
performance differentiated products accounted 
for 47 of the total product mix in 2011 for the 
year up ﬁve percentage points on 2010 sales  
of unique differentiated products such as 
splashworld holiday village sensatori and 
couples have grown by 14 in the year whilst sales 
of lower margin commodity products have declined 
by 5 the couples concept which was introduced 
in 2011 has been a particular success all 16 hotels 
in this range are strictly child free the first choice 
holiday village portfolio has also been expanded 
with a new unit in tenerife and a planned opening 
in menorca 
in addition exclusive products which can only be 
booked via thomson and first choice accounted 
for a further 19 of our customers this together 
with the growth of differentiated product helps to 
provide an enhanced and unique product offering 
to our customers
online distribution accounted for 39 of bookings 
in 2011 more customers book using our website 
than by any other distribution channel signiﬁcant 
enhancements were made to both the thomson 
and first choice websites that have improved 
navigation customer experience and ‘look to book’ 
ratios thomson is one of the top three most 
visited travel websites in the uk
the uk business delivered the ﬁnal £5m of 
postmerger synergies in the ﬁrst quarter and 
delivered a further £12m of cost efﬁciency savings 
mainly relating to pensions and back ofﬁce cost 
reductions in the remainder of the year our 
business in ireland delivered a turnaround of £4m 
in the year with the completion of the programme 
of capacity rationalisation and cost savings which 
commenced in 2010
mainstream sector 
northern region
the northern region reported an underlying operating proﬁt of £250m 2010 £183m all 
divisions improved year on year with particularly strong performances by the uk and nordic 
region and the completion of the turnaround programme in canada following the strategic  
venture with sunwing
the main drivers of the year on year change in underlying operating proﬁt are summarised in the  
following table
  nordic   northern
£m uk region canada hotels region
2010 127 56 5 5 183
incremental synergiescost efficiencies 17 – – – 17
turnaround 4 – 23 – 27
magic life – – – 8 8
egypttunisia 5 3 – – 8
trading 6 13 1 3 21
fx translation – 4 1 3 2
2011 149 70 18 13 250
 
northern region   2011 2010 change 
customers ‘000
1
uk  ireland   5440 5399 1
nordic region   1427 1224 17
total   6867 6623 4
revenue £m
uk  ireland   3588 3392 6
nordic region   1054 864 22
canada
1
   – 52 na
hotels   29 63 54
total   4671 4371 8
underlying operating proﬁtloss £m
uk  ireland   149 127 17
nordic region   70 56 25
canada   18 5 na
hotels   13 5 160
total   250 183 37
1  from 14 january 2010 our canadian operations have been accounted for under the equity method canadian customer numbers have been 
excluded in both periods
business and ﬁnancial review
segmental performance continued wwwtuitravelplccom wwwtuitravelplccom
38 tui travel plc annual report  accounts 2011 tui travel plc annual report  accounts 2011 39
group at a glance governance financial statements shareholder information
business and ﬁnancial review
business and ﬁnancial review strategic overview
tui ﬂagship store berlin
tui germany has opened the 
country’s most modern travel 
agency in berlin it combines  
the beneﬁts of personal travel 
consultancy with stateofthe
art media and technology such  
as largesize lcd screens ipads 
and internet research the 
contemporary store design  
not only creates an entirely  
new shopping experience but 
provides an impressive backdrop 
for customer events as such 
tui’s new ﬂagship store serves 
as a blueprint for the next 
generation of travel agencies  
to be rolled out across tui’s 
retail chain
business and ﬁnancial review
segmental performance continued
austria
austria reported underlying operating proﬁt  
of £11m £2m ahead of prior year 2010 £9m  
the downturn in demand for north african 
destinations was offset by increased bookings for 
overland tours controlled distribution improved  
by ﬁve percentage points to 36 driven by growth 
in the retail and online channels
switzerland
in switzerland underlying operating proﬁt was £5m 
for the year 2010 £4m trading was challenging  
as a result of the strong swiss franc which has led 
some customers to book holidays from eurozone 
source markets which border on switzerland this 
was offset by cost efﬁciencies
poland
in poland the underlying operating loss was £2m 
2010 £2m loss partly due to fuel surcharges 
from third party carriers through the summer 
which could not be passed on to the customer  
we have commenced the turnaround programme 
in this source market and expect the beneﬁts to  
be realised from 2012
germany
in germany underlying operating proﬁt was £89m 
2010 £81m this included £11m favourable 
impact from foreign currency translation partly 
offset by £6m impact of unrest in north africa
the main tour operator tui germany experienced 
improved demand in the summer versus prior  
year when we were able to ﬂex capacity to enable 
customers to switch from egypt to destinations 
such as the balearics greece and turkey albeit at 
lower margins than egypt margins beneﬁted from 
the expansion of our differentiated offering 
through the sensimar and puravida properties 
differentiated product accounted for 32 of our 
volumes in 2011 however some of the specialist 
tour operators such as l’tur tourismus ag and 
gebeco experienced more challenging trading 
conditions as a result of macroeconomic and 
geopolitical factors
online bookings accounted for 19 of the total  
up two percentage points on prior year this  
was offset by a reduction in bookings through 
franchised retail shops with controlled distribution 
remaining at 51 as a result of increased bookings 
through owned retail shops
on 29 september 2011 we announced plans to 
implement a strategy and growth programme  
get 2015 through which tui germany expects  
to improve margins this will be achieved via 
increased focus on differentiated and exclusive 
product increasing our online business through 
signiﬁcant website developments and back  
ofﬁce restructuring these actions will take  
place alongside previously announced initiatives  
to replace outdated it systems which will drive 
cost reductions
central europe
central europe reported an £11m increase in underlying operating proﬁt to £103m 2010 £92m
the main drivers of the year on year change in underlying operating proﬁt are summarised in the  
following table
     central 
£m germany austria switzerland poland europe
2010 81 9 4 2 92
egypttunisia 6 1 – – 7
trading 3 1 – – 4
fx translation 11 2 1 – 14
2011 89 11 5 2 103
 
central europe   2011 2010 change 
customers ‘000
germany
1
   6424 6208 3
austria   543 558 3
switzerland
1
   149 161 7
poland   166 116 43
total   7282 7043 3
revenue £m
germany   4235 3800 11
austria   333 324 3
switzerland   184 183 1
poland   89 68 31
total   4841 4375 11
underlying operating proﬁtloss £m
germany   89 81 10
austria   11 9 22
switzerland   5 4 25
poland   2 2 flat
total   103 92 12
1  customer ﬁgures for germany and switzerland have been restated for 2010 to reﬂect redeﬁned product reporting following the 
implementation of a new system
dynamic ‘discount travel’
tui germany has successfully 
advanced the business model  
of its ‘discount travel’ brand 
having marketed tui holidays 
exclusively at attractive prices  
in the past discount travel  
now actively seeks and bundles 
product from third party 
suppliers and partners as well in 
consequence the new business 
model not only increases product 
availability to the customer but 
also generates an additional 
revenue stream for the brand wwwtuitravelplccom wwwtuitravelplccom
40 tui travel plc annual report  accounts 2011 tui travel plc annual report  accounts 2011 41
group at a glance governance financial statements shareholder information
business and ﬁnancial review
business and ﬁnancial review strategic overview
business and ﬁnancial review
segmental performance continued
distribution and yield management in addition 
cost efﬁciency savings were made as a result  
of improved airline productivity and lower 
accommodation costs online distribution 
improved by three percentage points to 33 
belgium
underlying operating proﬁt in belgium was £60m 
2010 £56m after a good trading performance  
in the ﬁrst half as a result of higher volumes and 
better airline utilisation which offset the impact  
of unrest in north africa summer margins  
were below prior year this was due to a  
higher proportion of seat only sales as we are 
increasingly competing with low cost carriers to 
beach destinations the increase in seat only sales 
together with the increase in volumes sold through 
our direct seller sunjets increased sales through 
the online channel by four percentage points to 
37 leading to a four percentage point improvement 
in controlled distribution to 59 and reduced 
distribution costs as a proportion of revenue
southern europe
southern europe which consists of tour operators 
based in the italian and spanish source markets 
reported an underlying operating loss of £2m 
2010 proﬁt of £4m this reﬂects the challenging 
consumer environment in these source markets 
coupled with a reliance on north african destinations
jet4you
our moroccan low cost airline jet4you reported  
a lower underlying operating loss of £10m 2010 
loss of £13m we have expanded our business 
improvement programme to include jet4you and 
intend to bring the business to a break even result
the tour operator losses of £43m 2010 £14m 
proﬁt were driven by lower demand for north 
african destinations the french tour operators  
are particularly reliant on these destinations – 
historically egypt tunisia and morocco have  
made up around 40 of their capacity in total  
and around 65 for marmara alone a provision  
of £9m has been made in respect of prepayments 
for north african contracts as a result of lower 
demand for holidays in the region although 
volumes overall were ﬂat year on year margins 
were lower as a result of customers switching 
to higher cost destinations in the western 
mediterranean and greece in addition nouvelles 
frontières whose core competency has been in 
earlier selling long haul holidays has been impacted 
by the challenging consumer environment
as previously stated we have initiated a project  
to consolidate the businesses of the french tour 
operators with the aim of creating a single business 
with a long term viable future initial meetings with 
works council and local employees have taken 
place and the merger is progressing as anticipated
the airline result improved by £14m to a loss of 
£10m 2010 loss of £24m this was due partly  
to network planning improvements to better  
serve customer demand with a remodelled 
programme to the indian ocean and french west 
indies in addition the restructuring programme  
is progressing as planned
netherlands
netherlands achieved a signiﬁcant improvement in 
underlying operating proﬁt to £22m 2010 £7m 
the increase in proﬁt was driven by an increase in 
market share made possible by improvements in 
western europe
western europe reported an underlying operating proﬁt of £17m 2010 £44m
the main drivers of the year on year change in underlying operating proﬁt are summarised in the  
following table
   southern  western
£m france netherlands belgium europe jet4you europe
2010 10 7 56 4 13 44
turnaround 5 10 – – – 15
egypttunisia  
excluding france tour operator – – 2 1 – 3
provision for north africa contracts 9 – – – – 9
france tour operator 50 – – – – 50
trading 9 3 1 5 3 11
fx translation 2 2 5 – – 9
2011 53 22 60 2 10 17
 
western europe   2011 2010 change 
customers ‘000
france   2057 2063 flat
netherlands   1360 1211 12
belgium   2012 1861 8
southern europe   143 184 22
jet4you   529 497 6
total   6101 5816 5
revenue £m
france   1363 1311 4
netherlands   783 668 17
belgium   821 754 9
southern europe   103 131 21
jet4you   81 91 11
total   3151 2955 7
underlying operating proﬁtloss £m
france   53 10 430
netherlands   22 7 214
belgium   60 56 7
southern europe   2 4 na
jet4you   10 13 23
total   17 44 61
france
france reported an underlying operating loss of £53m 2010 loss of £10m the increase in loss was driven 
by the french tour operators partly offset by an improved performance by the airline corsair
france   2011 2010 change 
underlying operating lossproﬁt £m
tour operator   43 14 na
airline   10 24 58
total   53 10 430
emerging markets reported an underlying 
operating loss of £12m in 2011 2010 loss of £7m 
the result for this division reﬂects our continued 
investment in brand and distribution in russia  
and the cis the division now has over 510000 
customers up 6 on prior year the russian 
market is highly fragmented and competitive but 
continues to exhibit good growth characteristics  
for sun and beach package holidays with 
particularly good growth prospects in the  
regions outside of moscow 
emerging markets
emerging markets share of joint ventures   2011 2010 change 
underlying operating loss £m   12 7 71
we are continuing to evaluate our strategic 
participation options in the chinese market and 
have identiﬁed a number of long term growth 
opportunities during 2011 we were one of three 
foreign companies to be granted an outbound 
operating licence under the new pilot scheme 
introduced by the chinese national tourism 
authority this licence creates a new source  
market for us with excellent growth prospects
we are also exploring a number of projects in india 
to broaden our presence in the wider travel sector
tui china heading 
outbound
in may 2011 tui china was 
awarded an outbound tour 
operator licence by the national 
tourism administration of china 
positioning the brand as the  
only authorised european tour 
operator to provide international 
travel to chinese holidaymakers 
to date tui china has 
specialised as an inbound tour 
operator so the new outbound 
licence opens up signiﬁcant new 
opportunities
integration in russia and 
ukraine
tui travel continues to build its 
presence in the emerging 
markets of russia and ukraine 
having established a joint 
venture with sgroup during 
the year the joint venture has 
secured full control of three 
businesses vko group and 
mostravel in russia and voyage 
kiev in ukraine the two russian 
businesses are now being 
integrated to create a single 
multidestination operator 
take off 2012
the airline of group nouvelles 
frontières corsairﬂy 
successfully continued the 
rollout of its transformation 
project named ‘take off 2012’ 
with the plan to reposition the 
airline as a scheduled carrier 
specialising in long haul 
destinations ahead of schedule 
the management team has been 
strengthened products and 
services have been modernised 
and the ﬂight programme has 
been improved 
jetair celebrates 40th 
birthday and two million 
passengers
the tui belgium master brand 
jetair celebrated its 40th 
birthday with a further increase 
in bookings and gain in market 
share for the ﬁrst time in 
history over two million 
passengers travelled with tui 
belgium during the year this 
was realised through market 
leading customer satisfaction 
efﬁcient capacity management 
the launch of new destinations 
and a growing offer from 
regional airports  wwwtuitravelplccom wwwtuitravelplccom
42 tui travel plc annual report  accounts 2011 tui travel plc annual report  accounts 2011 43
group at a glance governance financial statements shareholder information
business and ﬁnancial review
business and ﬁnancial review strategic overview
business and ﬁnancial review
segmental performance continued
intercruises increased the number of port calls 
handled by over 30 to 8600 2010 6400 this 
was in part due to the expansion of offering in 
north america with the acquisition of tms gateway
the north african destination services businesses 
were adversely affected by the events earlier in the 
year as customers chose to travel to alternative 
destinations we acquired two destination services 
businesses in 2011 lima tours which specialises  
in creating and operating innovative and high value
added travel experiences in peru and svoy travel 
group which provides hotel accommodation and 
destination services in russia the latter being 
through our joint venture togebi holding limited
accommodation  destinations
ad delivered an underlying operating proﬁt of £72m 2010 £73m excluding the £10m 
investment in the accommodation ota proﬁts were up £9m on prior year driven by growth in the 
b2b division and laterooms uk and £3m favourable impact from new acquisitions and the 
annualised impact of 2010 acquisitions which offset the £4m adverse impact of unrest in the 
middle east and north africa
accommodation  destinations   2011 2010 change 
customers ‘000
b2b roomnights online     20
b2c roomnights online     14
incoming passenger volumes     7
revenue £m   652 587 11
underlying operating proﬁt £m   72 73 1
specialist holidays group underlying operating 
proﬁt was £21m 2010 £21m proﬁts on ski holidays 
were lower than prior year due in part to the late 
timing of easter and the division was affected by 
unrest in the middle east and north africa this 
was offset by improved summer volumes in citalia 
hayes  jarvis and sovereign and reduced shop 
costs following the closure of travelmood outlets
education underlying operating proﬁt was  
£14m 2010 £27m the decrease was driven by  
a reduction in demand for gap year travel the 
downturn in the uk economy and rise in university 
tuition fees means that fewer students are taking a 
gap year at the moment in addition the language 
division experienced operational difﬁculties during 
the year in view of this the division is undergoing 
restructuring in order to reduce back ofﬁce costs 
and drive operational efﬁciencies the result for 
2011 included £1m impact from new acquisitions 
and the annualised impact of acquisitions made  
in the prior year
as anticipated due to the lack of major sporting 
events in 2011 the sport division reported an 
underlying operating loss of £1m 2010 £5m proﬁt 
2010 included the fifa world cup which was not 
offset by proﬁts from the ashes tour in 2011
specialist  activity 
specialist  activity reported a proﬁt of £65m 2010 £78m down £13m driven by the education 
division this included £1m favourable impact from foreign currency translation £3m favourable 
impact from acquisitions including the annualisation impact of prior year acquisitions and £2m 
cost savings partly offset by £3m adverse impact of unrest in the middle east and north africa 
specialist  activity   2011 2010 change 
customers ‘000   1500 1611 7
revenue £m
adventure   208 211 1
north american specialist   130 127 2
education   211 228 7
sport   67 92 27
marine   141 134 5
specialist holiday group   615 559 10
total   1372 1351 2
underlying operating lossproﬁt £m
adventure   7 8 13
north american specialist   8 1 700
education   14 27 48
sport   1 5 na
marine   16 16 flat
specialist holiday group   21 21 flat
total   65 78 17
underlying operating proﬁt for north american 
specialist has improved to £8m 2010 £1m driven 
by a switch in mix towards lower volume higher 
margin products offered by operators such as 
starquest private jet tours and quark polar 
expeditions and improved cost control
marine underlying operating proﬁt was £16m 
2010 £16m strong cost control enabled  
the division to maintain its margins in spite of 
inﬂationary pressures during the year our inland 
waterways brand le boat launched the new 1500 
series of boats the rollout of which will continue  
in the next few years in addition the corporate 
ﬂeet has been refreshed in port solent in the uk 
these improvements will signiﬁcantly enhance 
customer experience
adventure underlying operating proﬁt was £7m 
2010 £8m excluding the impact of the strategic 
venture with intrepid travel which began in april 
proﬁt decreased by £3m this was driven by lower 
volumes and reduced margins for travel to australia 
as a result of the strong dollar and the ﬂoods in 
queensland early in 2011 in addition the result has 
been impacted by the unrest in the middle east 
and north africa
total transaction value for the sector increased by 
18 to £26bn 2010 £22bn this was driven by 
growth in hotelbeds and bedsonline in the b2b 
division by laterooms in the b2c division and  
by our cruise handling business intercruises
roomnights in the b2b division grew by 20 year 
on year bookings to all core destinations and from 
all source markets were up with americas and asia 
being the key growth drivers
the b2c division has continued its strategy of 
expansion and investment in the uk asia and 
europe the division has invested heavily in 
expanding asiarooms and laterooms – the  
latter both in the uk and europe laterooms  
has continued to increase its market share in  
the uk and outperformed the market with year  
on year growth in commissions of 21 in 2011 
intercruises’ delivers coast 
to coast in north america
intercruises a global provider of 
ground handling and port agency 
services to the ocean and river 
cruise industry extended its 
coverage of the north american 
region through the acquisition  
of tms gateway in june 2011 
intercruises now provides 
ground handling and port agency 
services at all major ports in 
north america including the 
west coast destinations of san 
diego los angeles seattle and 
vancouver 
10 years of success for 
hotelbeds
hotelbeds the international 
accommodation wholesaler 
celebrated its 10 year 
anniversary and transformation 
from a local to a global business 
with a brand relaunch at world 
travel market in london 
hotelbeds began with one source 
market the uk one destination 
spain and an accommodation 
database of 2000 hotels it now 
has over 100 source markets and 
manages an accommodation 
database of over 45000 hotels in 
more than 500 destinations 
hotelbeds has a market leading 
brand position and continues to 
outperform the market
global leaders in 
adventure travel
in february 2011 intrepid  
travel combined with tui 
travel’s international portfolio of 
adventure brands to create peak 
adventure travel group the 
largest adventure travel business 
in the world peak consists of 
over 20 brands with revenues of 
circa £230m and over 340000 
passengers combined they 
provide customers with every 
type of adventure holiday  
across all seven continents  
the brands include adventure 
center country walkers 
exodus intrepid travel  
oz experience peregrine 
sawadee trekamerica and 
westernxposure 
online gateway for 
specialist and activity 
holidays
during the year the specialist  
activity sector launched www
iexplorecomuk a onestop shop 
for inspirational experienced
based holiday ideas iexplore 
helps consumers achieve 
something unforgettable be it 
summiting kilimanjaro skiing 
that ﬁrst black run enjoying a 
sundowner on their own yacht 
experiencing the roar when  
their team wins or cuddling  
lion cubs the website’s unique 
‘holiday matchmaker’ tool  
helps customers identify their 
travelling style and matches  
it to their budget interests  
and expertise wwwtuitravelplccom wwwtuitravelplccom
44 tui travel plc annual report  accounts 2011 tui travel plc annual report  accounts 2011 45
group at a glance governance financial statements shareholder information
business and ﬁnancial review
business and ﬁnancial review strategic overview
business and ﬁnancial review
current trading and outlook
in france as previously stated we have initiated a 
project to consolidate the tourism businesses with 
the aim of creating a single french business with a 
long term viable future initial meetings with works 
council and local employees have taken place and 
the merger is progressing as anticipated
in addition for clarity purposes we will from now 
on combine the turnaround and cost efﬁciencies 
targets together under a new business improvement 
programme
in light of the above we have reassessed our target 
from the remainder of £78m and now expect 
incremental proﬁts and cost savings of £107m  
to be delivered in broadly even tranches over the 
next three years
outlook
as with the rest of the travel and aviation industry 
we continue to operate in a challenging geopolitical 
and economic environment which is demonstrated 
by the later booking proﬁle that we are seeing in 
some source markets we have adjusted our winter 
capacities to reﬂect the current market conditions 
and are trading in line with our expectations 
summer capacities will be ﬂexed to match 
proﬁtable demand
we remain focused on our strategy of increasing 
the proportion of sales of differentiated and 
exclusive product and on increasing controlled 
distribution with a focus on online to enhance  
our customer access and reduce distribution  
costs through our new business improvement 
programme we have self help measures in place  
to help offset the difﬁcult macroeconomic 
environment including clear plans in place for 
germany and france in addition we continue  
to strengthen our cash ﬂow in order to fund the 
dividend and growth all of which means that even 
in the current challenging market conditions we 
continue to operate from a position of strength
summer 2012
it is still early in the bookings cycle for summer 
2012 with most source markets outside of the 
northern region launching their main edition 
brochures in december
in the uk we have currently sold 19 of the 
programme bookings are 11 lower than prior 
year partly reﬂecting a reduction in capacity which 
is currently down 9 average selling price is up 
9 partly reﬂecting cost inﬂation of approximately 
5 and the higher proportion of differentiated 
products sold which currently account for 65  
of sales up eight percentage points on prior year
the nordic region programme was launched on  
20 october 2011 and as such it is very early in  
the bookings cycle with only 12 sold to date
fuelforeign exchange
we have hedged the majority of our fuel and 
currency requirements for the seasons currently  
on sale the following table shows the percentage 
of our forecast requirement that is currently 
hedged for euros us dollars and jet fuel we have 
previously stated that fuel costs are expected to 
rise by circa 30 in 2012 
   winter summer
   201112 2012
euro   98 92
us dollars   92 80
jet fuel   91 78
as at 1 december 2011
business improvement programme
we announced at the start of the year that we 
expected to deliver a further £89m through our 
turnaround programme across our mainstream 
businesses and a further £40m of cost savings and 
efﬁciencies in the uk mainstream business and 
group over a three year period we have delivered 
£42m of turnaround savings including £12m over 
delivered in canada and £21m of cost savings 
during 2011 leaving a remainder of £78m
our german mainstream business recently 
announced plans to implement a cost reduction 
and growth programme get 2015 through which 
it expects to improve margins this will be achieved 
via increased focus on differentiated and exclusive 
product increasing our online business through 
signiﬁcant website developments and back ofﬁce 
restructuring these actions will take place 
alongside previously announced initiatives to 
replace outdated it systems which will drive  
cost reductions 
in canada we are continuing to experience strong 
growth in demand and bookings are currently up 
34 capacity has been expanded to destinations 
in mexico and the caribbean with sales performing 
particularly well into the riu hotel portfolio we are 
currently 37 booked in canada
in the nordic region capacity has been increased 
with the expansion to destinations such as the 
canaries cape verde and mexico this has been 
facilitated by the arrival of two boeing 767s from 
the uk replacing a boeing 747 which came from 
corsair who have now reduced their ﬂeet and 
increased third party capacity volumes left to sell 
are currently 10 higher than prior year and our 
booked load factor is 73 volumes overall are  
ﬂat although within this sales to thailand are 
particularly difﬁcult due to the ﬂooding in and 
around bangkok while other destinations such  
as the canaries are selling well we have the 
ﬂexibility to switch capacity between destinations  
if appropriate differentiated volumes continue  
to grow with volumes up 31 on prior year
in germany capacity has been reduced by  
11 driven by lower demand for north african 
destinations bookings to egypt are currently  
39 behind prior year which is in line with capacity 
reductions this is partly offset by demand for 
alternative destinations such as the canaries  
up 12 booked load factor is 53 and average 
selling prices are up 5
the french tour operators continue to experience 
lower demand for north african destinations with 
volumes down 26 for egypt tunisia and morocco 
in addition there is a trend towards later bookings 
driven by the consumer environment however 
thanks to the planned merger capacities are shared 
and managed across the french tour operators so 
that load factors for the ﬁrst half of winter are in 
line with prior year
in belgium bookings are 2 ahead of last year  
and load factors are broadly in line the increase  
in volume continues to be driven by seat only and 
through an increase in long haul sales as we open 
up new destinations such as thailand in the 
netherlands our strong trading performance in 
summer 2011 has continued into winter 201112 
with volumes up 15 and average selling price up 
8 an increase in capacity mainly as a result of 
ﬂeet expansion has helped us continue to build  
on our market leading position 
in specialist  activity revenue is up 7 year on 
year with growth achieved in all divisions except 
adventure which continues to be affected by  
lower demand for north africa education and 
north american specialist are performing well
in ad bookings are up 15 versus last year 
driven by the b2b division where bookings are  
up 21 bookings for the b2c division are up 4 
following strong growth in 2010 we have now 
launched the asiaroomscom website in ﬁve  
local languages
winter 201112
we are satisﬁed overall with the progress of trading 
for winter 201112 bookings have slowed since our 
previous update in some source markets where  
as expected we are experiencing a later booking 
proﬁle reﬂecting the continuing issues in north 
africa and challenging consumer environment in 
these markets
  bookings
  since
 cumulative previous cumulative
year on year customer bookings trading bookings
booking variation  at 11 sept statement at 27 nov
uk  11 12 12
nordic region  1 flat flat
germany  3 10 8
france tour operators  7 14 12
belgium  2 3 2
netherlands  31 7 15
in the uk capacity has been reduced by 9 this is 
as a result of a change in aircraft ﬂeet mix including 
moving aircraft within the group to serve higher 
demand in the canadian and nordic markets most 
of the capacity reduction has come out of egypt 
and tunisia booked load factor remains broadly in 
line with prior year at 48 volumes sold since our 
last update are down 12 highlighting the later 
booking proﬁle compared with prior year this slow 
down is being driven by the continuing issues in 
north africa and a weaker consumer environment 
average selling prices are up 5 which partly 
reﬂects cost inﬂation of approximately 4 as well 
as the higher proportion of differentiated product 
sales differentiated product continues to book 
earlier and experience higher demand with 
volumes up 12 compared with last year
current trading
1
 winter 201112 risk only
  
 total total total
 asp
2
 sales
2
 customers
2
 capacity
3
 left to sell
3
year on year variation 
mainstream
uk 5 7 12 9 6
nordic region 1 1 flat 3 12
northern region 4 4 7  
germany 5 3 8 11 3
austria 3 6 9  
switzerland 16 17 1  
poland 10 49 36  
central europe 4 3 7  
france tour operators 1 12 11  
belgium flat 3 3  
netherlands 8 24 15  
western europe 2 2 1  
specialist  activity na 7 na  
accommodation  destinations
4
 4 21 16  
1  these statistics are up to 27 november 2011
2  these statistics relate to all customers whether risk or nonrisk
3  these statistics include all risk capacity programmes
4  these statistics refer to online accommodation businesses only sales refer to total transaction value and customers 
refers to roomnights
current trading
1
 summer 2012 risk only
  
 total total total
 asp
2
 sales
2
 customers
2
 capacity
3
 left to sell
3
year on year variation 
uk 9 3 11 9 8
nordic region 5 9 14 1 3
northern region 8 4 11  
1  these statistics are up to 27 november 2011
2  these statistics relate to all customers whether risk or nonrisk
3  these statistics include all risk capacity programmes governance
board of directors
governance
wwwtuitravelplccom wwwtuitravelplccom
46 tui travel plc annual report  accounts 2011 tui travel plc annual report  accounts 2011 47
group at a glance strategic overview business and ﬁnancial review governance financial statements shareholder information
1
4
7
10
13
16
2
5
8
11
14
3
6
9
12
15
services aegis aegis managing agency limited uk 
hsbc north america holding inc talisman energy inc 
and us cold storage inc 
11 rainer feuerhake
nonexecutive director age 67
rainer feuerhake joined the preussag group now  
tui ag in 1968 and by 1980 was responsible for group 
accounting rainer was appointed as chief financial 
ofﬁcer of preussag ag in november 1988 and 
subsequently tui ag following a resolution to rename 
preussag ag on 1 july 2002 in this position rainer  
was responsible for the departments of accounting  
 reporting finance investor relations tax affairs 
mergers  acquisitions destination management  
and the shared service centre he resigned as chief 
financial ofﬁcer in february 2010 and is now acting  
as a consultant for tui ag he joined the board of  
tui travel plc on 28 june 2007
12 harold sher
nonexecutive director age 64
harold sher joined the board of tui travel plc as  
a nonexecutive director on 29 october 2007 he 
studied commerce at university and started his career  
as a chartered accountant harold moved to industry 
early in his career holding a range of executive positions 
before being appointed chief executive of amalgamated 
metal corporation plc in 1992 a position he still holds 
he has served as president of a major north american 
steel services group and together with his role at 
amalgamated metal corporation this has provided  
him with broad international commercial experience
13 dr albert schunk
nonexecutive director aged 70
dr albert schunk joined the board of tui travel plc  
as a nonexecutive director on 29 october 2007  
albert studied economics at university and carried out  
a research project for the german government in latin 
america after joining igmetall he has served on the 
supervisory board of volkswagen and other german 
companies since 1976 in 1994 he became a member of 
the european economic and social council in brussels 
and has recently been advising the riu group in spain
14 dr erhard schipporeit
nonexecutive director age 62
dr erhard schipporeit joined the board of tui travel 
plc as a nonexecutive director on 29 october 2007 
he started his career in 1979 in the bosch group and  
in 1981 he joined varta agvarta battery ag at  
that time a leading european battery company where 
he became chief financial ofﬁcer in 1990 and chief 
executive and chairman of the executive board in 1993 
after the successful restructuring of varta the next 
move in his career brought him to the munich based 
conglomerate company viag ag as cfo viag merged 
in 2000 with veba ag to form the new eon ag one  
of the world’s leading utility companies erhard was  
cfo and executive board member of eon from 2000 
until his resignation in november 2006 he is currently  
a nonexecutive director of a number of companies 
including sap ag deutsche boerse ag talanx ag 
hanover rueckversicherung ag and fidelity sicav
15 minnow powell
nonexecutive director age 57
minnow powell became a nonexecutive director of  
tui travel plc in april 2011 during his 35 years at 
deloitte he became a senior partner and concentrated 
on looking after deloitte’s major clients including baa 
hammerson reed elsevier anglo american and bskyb 
he was also a member of the uk’s audit practices board 
for six years
16 coline mcconville 
nonexecutive director age 47
coline mcconville joined the board of tui travel plc on 
21 september 2011 her background is in management 
marketing and consulting she spent ten years at clear 
channel international limited where as chief executive 
for europe she was responsible for operations across  
58 countries including the uk france italy and spain 
coline began her career in management consultancy 
working with both mckinsey  co in london and the 
lek partnership in munich she is a law graduate with 
an mba from harvard 
mainstream sector which includes source markets uk 
and ireland canada sweden norway denmark and 
finland prior to the merger of first choice holidays plc 
and the tourism division of tui ag johan was chief 
executive of tui nordic and also took responsibility for 
tourism sales in the source markets of italy and russia
6 dr volker böttcher
managing director central europe age 52
dr volker böttcher joined the board of tui travel plc 
on 19 june 2007 and is responsible for central europe  
in the mainstream sector after an early career in law 
volker joined touristik union international in 1987 as  
a legal advisor having occupied various management 
positions he became head of tui’s special programmes 
division in 1996 which included responsibility for  
long haul destinations city tours and the eastern 
mediterranean in 2003 volker was appointed chairman 
for central europe for tui ag being responsible for all 
tourism activities in the source markets of germany 
austria switzerland and poland he was appointed to 
the board of tui deutschland gmbh in april 2000 
following the restructuring of tui’s business model in 
germany he was appointed ceo of tui deutschland 
gmbh in july 2001 
7 horst baier 
nonexecutive director age 55
horst baier joined the board of tui travel plc as  
a nonexecutive director on 13 october 2009 he 
commenced his professional career in the treasury 
department of continental ag the german tyre 
manufacturer between 1994 and 1996 horst was 
responsible for group financing for the fürthbased 
schickedanz group in 1996 he took over responsibility 
for the treasury accounting and tax department at  
tui ag since 2001 horst has been responsible for 
accounting  reporting for tui ag and in november 
2007 was appointed to the executive board of tui ag 
with responsibility for the controlling function in 
february 2010 horst was appointed chief financial 
ofﬁcer of tui ag
8 tony campbell
nonexecutive director age 62
tony campbell became a nonexecutive director  
of first choice holidays plc in april 1997 and joined  
the board of tui travel plc on 28 june 2007 as a 
nonexecutive director tony was deputy chief 
executive of asda stores limited until march 2001 he  
is currently the chairman of t m lewin group limited 
the white company uk limited and eat limited a 
nonexecutive director of the original factory shop and 
a director of data transfer  communications limited
9 clare chapman
nonexecutive director age 51
clare chapman became a nonexecutive director of 
first choice holidays plc first choice in march 2003 
she joined the board of tui travel plc which was 
formed when first choice merged with the tourism 
division of tui ag in september 2007 clare was also 
chairman of the remuneration committee she is 
currently group people director at bt group plc and 
was previously the director general of workforce for 
nhs and social care department of health before  
this clare was group personnel director at tesco in 
addition she serves on the advisory board member for 
the judge institute business school for the university 
of cambridge and is a fellow of the institute of 
personnel clare was appointed as a nonexecutive 
director of kingﬁsher plc in december 2010
clare resigned from the board of tui travel plc on  
19 october 2011
10 bill dalton
nonexecutive director age 67
bill dalton became a nonexecutive director of first 
choice holidays plc in october 2004 and joined the 
board of tui travel plc on 19 march 2007 bill is also 
chairman of the remuneration committee he was 
previously an executive director of hsbc holdings plc 
chief executive of hsbc bank plc and global head  
of personal financial services for the hsbc group 
during his banking career he has amassed a great deal 
of international expertise and is also a nonexecutive 
director of a number of uk and north american 
companies including associated electric  gas insurance 
1 dr michael frenzel
nonexecutive chairman age 64
dr michael frenzel joined the board of tui travel  
plc on 28 june 2007 as nonexecutive chairman 
michael studied law at ruhr university in bochum and 
completed his doctorate whilst working at the university 
as a scientiﬁc assistant he joined westdeutsche 
landesbank westlb düsseldorf in 1981 where  
he was promoted to various managerial positions  
and became manager of the industrial holdings 
department in 1983 and overall manager of westlb’s 
equity holdings division in 1985 – including holdings  
in banking leasing and real estate
in 1988 he became a member of the preussag ag 
executive board being responsible for trading and 
logistics michael has held the position of chief 
executive and chairman of the executive board of  
tui ag formerly preussag ag since january 1994 
overseeing its extensive acquisition programme in the 
late 1990s which resulted in the acquisitions of tui ag’s 
stake in hapaglloyd and of leading tourism businesses 
such as thomson travel and nouvelles frontières 
michael is also currently a member of the supervisory 
board of a number of companies including axa konzern 
ag awd holding ag and volkswagen ag
2 sir michael hodgkinson 
nonexecutive deputy chairman and senior 
independent director age 67 
sir michael hodgkinson joined the board of first choice 
holidays plc as a nonexecutive director in january 
2004 and became chairman in march 2004 he joined 
the board of tui travel plc on 28 june 2007 as 
nonexecutive deputy chairman and is the senior 
independent director following an early career in the 
automotive industry he was appointed chief executive 
of grand metropolitan’s european food division in 1986 
and in 1992 he joined baa plc becoming chief executive 
in 1999 a post from which he retired in june 2003 
sir michael was senior nonexecutive director at  
royal mail and chairman of post ofﬁce limited until 
september 2007 a director of bank of ireland plc from 
may 2004 until july 2006 and a nonexecutive director 
of dublin airport until november 2011 he is currently  
a nonexecutive director of transport for london and 
crossrail limited and was appointed chairman of keolis 
uk limited on 11 october 2011 
3 peter long
chief executive age 59
peter long joined the board of tui travel plc on  
28 june 2007 as chief executive in november 1996  
he was appointed group managing director of first 
choice holidays plc and became chief executive in 
september 1999 prior to joining first choice he was 
chief executive of sunworld holidays
from february 2001 to june 2005 peter was a 
nonexecutive director of rac plc and from april  
2006 to july 2009 he was a nonexecutive director of 
debenhams plc peter was appointed as a nonexecutive 
director of rentokil initial plc in 2005 and is currently  
the senior independent nonexecutive director 
4 william waggott
chief financial ofﬁcer age 48
william waggott joined the board of tui travel plc on 
28 june 2007 as commercial director he was appointed 
chief financial ofﬁcer of tui travel plc in november 
2010 will spent the early part of his career with coopers 
 lybrand and courtaulds textiles plc where he 
performed various senior group ﬁnance and divisional 
director roles he entered the leisure travel industry 
when he joined airtours plc and held a number of 
positions including uk leisure group ﬁnance director 
prior to joining thomson travel group in 2001 he  
then went on to become chief financial ofﬁcer of  
tui tourism in 2006
5 johan lundgren
deputy chief executive age 45
having worked in the tourism industry for twenty  
ﬁve years johan is the deputy chief executive of tui 
travel plc responsible for the mainstream sector and 
was appointed to the board of tui travel plc on 21 
december 2007 prior to his appointment as deputy 
chief executive in october 2011 he was managing 
director of the northern region of tui travel’s  wwwtuitravelplccom wwwtuitravelplccom
48 tui travel plc annual report  accounts 2011 tui travel plc annual report  accounts 2011 49
group at a glance strategic overview business and ﬁnancial review shareholder information financial statements governance
governance
contractual arrangements
the group has contractual arrangements with numerous third parties 
in support of its business activities see pages 30 and 48 
independent auditors
kpmg audit plc the previous auditors did not seek reappointment 
for the year ended 30 september 2011 and therefore the directors 
appointed pricewaterhousecoopers llp a resolution to reappoint 
pricewaterhousecoopers llp will be proposed at the agm 
statement of the directors as to disclosure of 
information to the auditors
the directors conﬁrm that so far as they are each aware there is  
no relevant audit information of which the company’s auditors are 
unaware and each director has taken all the steps that he or she 
ought to have taken as a director to make himself or herself aware  
of any relevant audit information and to establish that the company’s 
auditors are aware of that information 
other information
other information relevant to the directors’ report can be found  
in the following sections of the annual report
information location in annual report
people page 24
social responsibility page 24
sustainable development page 28
charitable and political donations page 30
future developments page 45
board and committee membership pages 51 and 52
financial risk management page 20 
pension schemes financial statements – note 6c
acquisitions financial statements – note 13
post balance sheet events after 
30 september 2011  financial statements – note 33
share capital – authorised and issued financial statements – note 23
substantial shareholdings page 144
the directors’ report was approved by a duly authorised committee 
of the board of directors on 4 december 2011 and signed on its 
behalf by andrew john the company secretary
by order of the board
andrew john
company secretary
4 december 2011
company number 6072876
£1155m bank revolving credit facility agreement
an agreement dated 17 may 2011 between a number of relationship 
banks and the company relating to a £1155m bank revolving credit 
facility currently provided to the company contains terms which  
give the lending banks the right to cancel all commitments to the 
company and to declare all outstanding credits and accrued interest 
immediately due and payable if a change of control occurs for the 
purpose of this agreement a change of control occurs if
• any person or group of persons acting in concert gains control of 
the company or
• tui ag and any persons acting in concert with it acquires or acquire 
75 or more of the voting shares in the company
£350m 60 convertible bonds
in september 2009 the company issued £350m of 60 convertible 
bonds with a conversion price set at 34930p per share the settlement 
took place on 5 october 2009 the convertible bonds contain terms 
which give the bondholders the right to redeem the bonds at their 
principal amount together with accrued and unpaid interest up to the 
date of redemption if a change of control occurs for the purpose of 
the convertible bonds a change of control occurs if
• following a takeover offer to acquire all or a majority of the shares 
in the company being declared unconditional in all respects or 
becoming effective the offeror andor its associates have or  
will have more than 50 of the voting rights in the company or
• the free float of the company is less than 30 of the issued 
ordinary shares for at least ﬁve consecutive dealing days where  
the free float is a all outstanding ordinary shares of the company 
less those held by or on behalf of tui ag its associates and any 
persons acting in concert with it and b the ordinary shares 
underlying the outstanding secured exchangeable bonds due  
2013 issued by nero finance limited on 16 january 2008
£400m 490 convertible bonds
in april 2010 the company issued £400m of 490 convertible bonds 
with a conversion price set at 38234p per share the settlement took 
place on 27 april 2010 the convertible bonds contain terms which 
give the bondholders the right to redeem the bonds at their principal 
amount together with accrued and unpaid interest up to the date  
of redemption if a change of control occurs for the purpose of the 
convertible bonds a change of control occurs if
• following a takeover offer to acquire all or a majority of the  
shares in the company being declared unconditional in all respects 
or becoming effective the offeror andor its associates have or will 
have more than 50 of the voting rights in the company or 
• the free float of the company is less than 30 of the issued 
ordinary shares for at least ﬁve consecutive dealing days where  
the free float is a all outstanding ordinary shares of the company 
less those held by or on behalf of tui ag its associates and any 
persons acting in concert with it and b the ordinary shares 
underlying the outstanding secured exchangeable bonds due  
2013 issued by nero finance limited on 16 january 2008
tui ag subscribed at the issue price for 50 of the convertible bond 
offering to prevent the potential dilution of its majority shareholding 
going concern 
after making appropriate enquiries the directors have reasonable 
expectation that the company and group have adequate resources  
to continue operations for the foreseeable future for this reason 
they continue to adopt the going concern basis in preparing the 
ﬁnancial statements
a further summary of funding and liquidity is included in note 1bvi 
to the consolidated ﬁnancial statements
group policy that payments to suppliers whether in advance or after 
the provision of the goods or services are made on the basis of the 
terms that have been agreed with them
the company had no trade creditors at 30 september 2011  
2010 £nil and consequently creditor days have not been presented  
where the company is the recipient of goods or services payment of 
suppliers is conducted by one of the group companies in accordance 
with the policy set out above
charitable giving and political donations
we have developed a groupwide charity policy and guidelines to 
ensure transparency in our charitable activities and to enable us to 
report annually on tui travel’s charitable giving during the year the 
group made charitable donations of £380680 2010 £475277 for 
further details see page 30 the group made no political contributions 
during the year 2010 £nil
directors and their interests
details of directors and their biographies can be found in the 
corporate governance report on page 46 and directors’ interests  
are given in the remuneration report on page 65
directors’ and ofﬁcers’ insurance
the company has purchased and maintained throughout the year 
directors’ and ofﬁcers’ liability insurance and the level of cover is 
regularly reviewed
signiﬁcant agreements – change of control
the companies act 2006 requires us to disclose any signiﬁcant 
agreements that take effect alter or terminate on a change of  
control of the company
relationship agreement with tui ag
the relationship agreement between tui ag and tui travel  
dated 29 june 2007 includes the principle that tui travel will operate 
independently of tui ag and records the understanding between  
tui ag and tui travel regarding the relationship between them and 
the governance of tui travel the relationship agreement will remain 
in force until either the shares in tui travel are no longer admitted  
to trading on the london stock exchange or tui ag has less than 
10 of the rights to vote at general meetings in addition in the event 
that another party acquires control of tui ag during the term of the 
relationship agreement tui ag will lose certain rights under the 
relationship agreement including its rights in respect of the 
composition of the board
the relationship agreement contains restrictions on the acquisition 
by tui ag of additional shares in tui travel which result in the increase 
of its shareholding to more than 55 of the voting rights on a fully 
diluted basis save where tui ag makes a general offer to acquire all 
tui travel shares in issue a number of bonds are held on tui ag’s 
behalf and if converted at the conversion price set on the launch 
date would give rise to 52309463 new shares on a fullydiluted  
basis if shares held by all bondholders were converted tui ag had  
a holding of 5083 as at 30 september 2011 as a percentage of 
shares in issue tui ag’s holding as at 30 september 2011 was 5547
tui ag has antidilution rights in respect of further issues of shares  
in tui travel other than on a preemptive basis tui travel has also 
agreed that certain matters will require the prior approval of 80 of 
the directors present at the meeting of the board at which such matter 
is considered including material changes to the business of any group 
company acquisitions and disposals of a value which exceeds £10m 
the entry into variation or redemption prior to their due date of any 
borrowing facilities and the approval of the annual budget
the directors submit their report and the audited ﬁnancial 
statements of the company and the group to the members of tui 
travel plc the company for the year ended 30 september 2011
principal activity
the principal activity of the tui travel plc group of companies  
the group is that of an international leisure travel business and  
the principal activity of the company is that of a holding company  
it provides a broad and diverse range of leisure travel experiences to 
more than 30 million customers in 31 key source markets for further 
information see tui travel overview page 2
annual general meeting
the annual general meeting agm will be held on tuesday 7 
february 2012 at 1030 am at the ofﬁces of herbert smith exchange 
house primrose street london ec2a 2hs an explanation of  
the business to be transacted at the agm has been circulated to 
shareholders and can be found on the website wwwtuitravelplccom
business performance
a description of the business performance for the year ended  
30 september 2011 prepared in accordance with the companies  
act 2006 is set out on pages 32 to 43 and forms part of the  
directors’ report 
results and dividends
the group proﬁt before taxation for the year ended 30 september 
2011 was £144m 2010 restated loss of £73m the directors 
recommend a ﬁnal dividend of 80p per ordinary share 2010 78p 
payable on 10 april 2012 to holders on the register at the close of 
business on 9 march 2012 when taken with the interim dividend  
of 33p per ordinary share paid on 3 october 2011 2010 32p this 
gives a total dividend of 113p per share 2010 110p relating to the 
year ended 30 september 2011 
key performance indicators and principal risks and 
uncertainties
see page 18 for the key performance indicators and page 20 for the 
principal risks and uncertainties
corporate governance report
the corporate governance report for the year ended 30 september 
2011 prepared in accordance with rule 72 of the fsa’s disclosure and 
transparency rules is set out on pages 51 to 55 and forms part of the 
directors’ report
suppliers
tui travel beneﬁts from both its economies of scale and application 
of purchasing power our principal suppliers are hotel owners and 
operators and aircraft suppliers amongst others our key strategic 
relationships are with hotel chains such as riu fiesta atlantica and 
aircraft providers such as boeing each source market has local and 
overseas teams to engage in effective procurement strategies to 
deliver optimum beneﬁts to tui travel cooperative working is 
fundamental to our relationships with key suppliers to ensure that  
the highest standards in terms of health  safety and quality are 
maintained suppliers falling below these expectations will be 
removed from our programmes
the operating units within the group are responsible for agreeing the 
terms and conditions under which business transactions with their 
suppliers are conducted due to the nature of the group’s operations 
and in common with the industry as a whole payments are often 
made in advance for the provision of goods and services the group 
does not follow any code or statement on payment practice but it is 
governance
directors’ report wwwtuitravelplccom wwwtuitravelplccom
50 tui travel plc annual report  accounts 2011 tui travel plc annual report  accounts 2011 51
group at a glance strategic overview business and ﬁnancial review shareholder information financial statements governance
governance
corporate governance report
board proceduresresponsibilities
the board meets regularly including away days to review the 
strategy of the group and is responsible for the overall leadership and 
control of the group the schedule of matters speciﬁcally reserved to 
it for decision includes 
• determining the strategy of the group 
• amendments to the structure and capital of the group 
• approval of ﬁnancial reporting and controls 
• oversight of the group’s internal controls
• approval of capital and revenue expenditure of a signiﬁcant size 
• acquisitions disposals and share dealings 
• board membership and appointments 
• approval of remuneration of directors and certain senior 
management
• corporate governance matters 
• approval of group policies and risk management strategies 
the division of responsibilities between the chairman and chief 
executive is clearly established has been agreed by the board and  
is reviewed by the company secretary on a regular basis
all directors have access to the advice and services of the company 
secretary and can take independent professional advice if necessary 
at the company’s expense to the company secretary’s knowledge 
no such advice was sought by any director during the year 
the company secretary is responsible for ensuring board procedures 
are followed including the formal minuting of any unresolved concerns 
that any director may have in connection with the operation of the 
company in january 2011 jeremy hicks and giles thorley resigned 
their positions as nonexecutive directors of the company their 
letters of resignation were circulated to the board and discussed and 
recorded in the board minutes 
the terms of reference for the board and its committees are 
available for inspection on the group’s website wwwtuitravelplccom 
and will be available at the agm
directors’ conﬂicts of interests 
under the companies act 2006 the directors have a statutory duty 
to avoid a situation where they have or could have a direct or indirect 
interest that conﬂicts or possibly may conﬂict with the interests of 
the company directors of public companies may authorise conﬂicts 
and potential conﬂicts where appropriate if the articles of association 
contain a provision to this effect 
the company’s articles of association permit the board to authorise 
actual or potential conﬂicts of interest the company has established 
formal procedures for the disclosure and review of any conﬂicts or 
potential conﬂicts of interest which the directors may have and for 
the authorisation of such conﬂict matters by the board in deciding 
whether to authorise a conﬂict or potential conﬂict the directors must 
have regard to their general duties under the companies act 2006 
the authorisation of any conﬂict matter and the terms of authorisation 
may be reviewed at any time and will be reviewed formally by the 
board on an annual basis the board believes that the procedures 
established to deal with conﬂicts of interest are operating effectively
board effectiveness and individual performance of directors 
an effectiveness survey of the board and its committees audit 
remuneration and nomination was undertaken during junejuly 
2011 this also included a series of questions appraising individual 
directors including the chairman the survey was undertaken online 
and was facilitated by an external provider which has no connection 
with the company each director was asked to place a score against  
the company has complied with the principles set out in section 1 of 
the uk corporate governance code issued by the financial reporting 
council in june 2010 the code except in the areas detailed in the 
report and set out on page 55
the board 
the company is controlled through its board of directors – the 
directors at the date of this report are
director’s name title
horst baier nonexecutive director
dr volker böttcher managing director central europe
tony campbell independent nonexecutive director
bill dalton independent nonexecutive director
rainer feuerhake nonexecutive director
dr michael frenzel nonexecutive chairman
sir michael hodgkinson  independent nonexecutive deputy chairman  
and senior independent director
peter long chief executive
johan lundgren deputy chief executive
coline mcconville independent nonexecutive director
minnow powell independent nonexecutive director
dr erhard schipporeit independent nonexecutive director
dr albert schunk independent nonexecutive director
harold sher independent nonexecutive director
william waggott chief financial ofﬁcer
all directors detailed above served throughout the year with the 
exception of minnow powell appointed on 4 april 2011 and coline 
mcconville appointed 21 september 2011 directors resigning during 
the year were paul bowtell stepped down 31 december 2010 
jeremy hicks resigned 31 january 2011 and giles thorley resigned 
31 january 2011 clare chapman resigned on 19 october 2011 johan 
lundgren was appointed deputy chief executive with effect from  
20 october 2011
as at 30 september 2011 the board comprised four executive 
directors and 11 nonexecutive directors including the chairman 
biographical details of all the directors are set out on page 47
in accordance with the new uk corporate governance code 
guidelines all directors will be subject to annual reelection by 
shareholders to enable shareholders to make an informed decision 
the 2012 notice of the annual general meeting agm includes 
biographical details and a statement as to why the company believes 
the directors should be reelected the chairman intends to conﬁrm 
at the agm that the performance of each individual continues to be 
effective and demonstrates commitment to the role 
the board recommends to shareholders the reappointment of  
all directors retiring at the meeting on the basis that they are all 
effective directors of the company and demonstrate the appropriate 
level of commitment in their respective roles 
the terms of the directors’ service contracts are disclosed in the 
remuneration report commencing on page 56 directors’ interests  
in the shares of the company are disclosed on page 65 
directors’ service contracts and the letters of appointment of the 
nonexecutive directors are available for inspection at the company’s 
registered ofﬁce and will be available at the agm which is scheduled 
to take place on tuesday 7 february 2012 
following the appointment of any new director the chairman  
in conjunction with the company secretary ensures that a full  
formal and tailored induction to the company is made available  
the company secretary is on hand to answer any questions which 
may arise all directors have been given a detailed induction and 
training manual 
governance
statement of directors’ responsibilities
under applicable law and regulations the directors are also 
responsible for preparing a directors’ report directors’ remuneration 
report and corporate governance statement that complies with that 
law and those regulations
the directors are responsible for the maintenance and integrity of 
the corporate and ﬁnancial information included on the company’s 
website legislation in the uk governing the preparation and 
dissemination of ﬁnancial statements may differ from legislation  
in other jurisdictions
the directors in ofﬁce at the date of approval of the annual report  
 accounts each conﬁrm that to the best of their knowledge
• the group ﬁnancial statements which have been prepared in 
accordance with ifrss as adopted by the eu give a true and fair view 
of the assets liabilities ﬁnancial position and proﬁt of the group
• the directors’ report includes a fair review of the development and 
performance of the business and position of the group together 
with a description of the principal risks and uncertainties that it faces
the statement of directors’ responsibilities was approved by a duly 
authorised committee of the board of directors on 4 december 2011 
and signed on its behalf by william waggott chief financial ofﬁcer
william waggott
chief financial ofﬁcer
4 december 2011
the directors are responsible for preparing the annual report  
the directors’ remuneration report and the ﬁnancial statements  
in accordance with applicable law and regulations
company law requires the directors to prepare group and parent 
company ﬁnancial statements for each ﬁnancial year under that  
law they are required to prepare the group ﬁnancial statements in 
accordance with international financial reporting standards ifrs  
as adopted by the eu and applicable law and have elected to prepare 
the parent company ﬁnancial statements in accordance with uk 
accounting standards and applicable law uk generally accepted 
accounting practice under company law the directors must not 
approve the ﬁnancial statements unless they are satisﬁed that they 
give a true and fair view of the state of affairs of the group and the 
company and of their proﬁt or loss of the group for that period  
in preparing each of the group and parent company ﬁnancial 
statements the directors are required to
• select suitable accounting policies and then apply them consistently
• make judgments and estimates that are reasonable and prudent
• state whether ifrss as adopted by the european union and 
applicable uk accounting standards have been followed subject  
to any material departures disclosed in and explained in the group 
and parent company ﬁnancial statements respectively
• prepare the ﬁnancial statements on the going concern basis unless 
it is inappropriate to presume that the group and the parent 
company will continue in business
the directors are responsible for keeping adequate accounting 
records that are sufﬁcient to show and explain the parent company’s 
transactions and disclose with reasonable accuracy at any time the 
ﬁnancial position of the company and the group and enable them  
to ensure that the ﬁnancial statements and directors’ remuneration 
report comply with the companies act 2006 and as regards to the 
group ﬁnancial statements article 4 of ias regulation they are  
also responsible for safeguarding the assets of the company and  
the group and hence for taking reasonable steps for the prevention 
and detection of fraud and other irregularities wwwtuitravelplccom wwwtuitravelplccom
52 tui travel plc annual report  accounts 2011 tui travel plc annual report  accounts 2011 53
group at a glance strategic overview business and ﬁnancial review shareholder information financial statements governance
governance governance
corporate governance report continued
the chief financial ofﬁcer the director of group audit services  
risk and the external auditor are normally invited to meetings and 
other directors including the chief executive and the nonexecutive 
directors may also attend the audit committee meets with the 
external auditor without management present and also meets with 
the director of group audit services without management present
the committee’s duties which were discharged during the year include 
• monitoring the integrity of the ﬁnancial statements of the company 
and formal announcements relating to the company’s ﬁnancial 
performance and reviewing the signiﬁcant ﬁnancial reporting 
judgments contained therein
• reviewing the company’s internal control and risk management 
systems including presentations from sector regional and 
functional management 
• agreeing in advance the work of group audit services and 
reviewing the results of the work undertaken
• considering the appointment reappointment and removal 
approval of remuneration and terms of engagement of the  
external auditor
• reviewing the policy for the engagement of the external auditor  
to supply nonaudit services the audit committee has concluded 
that in some cases the provision of nonaudit services by the 
incumbent auditor which does not impact on their independence  
in providing their primary statutory audit role is appropriate and 
this has been communicated to the board auditor independence 
and objectivity are safeguarded by the audit committee monitoring 
and approving where appropriate the nature of the work and the 
level of fees paid for nonaudit services as a proportion of the total 
audit fees paid
• reviewing and revising the committee’s terms of reference
during the year the audit committee has focused on improving  
key ﬁnancial controls processes and procedures in the uk  ireland 
mainstream business a new senior management team is in place and 
a review has been completed of critical processes and procedures 
control improvements which have been identiﬁed are being 
implemented and a process of continuous monitoring of these 
controls will also be established as part of the ongoing work on 
processes and procedures elsewhere in the group net writeoffs  
of £7m have been identiﬁed arising from the understatement of 
current liabilities in nouvelles frontières french tour operator  
offset by surplus sundry payables which had not been eliminated 
from the group balance sheet see note 4 of the consolidated 
ﬁnancial statements for further details finally in the tui travel 
marine business an extensive review of back ofﬁce ﬁnance processes 
has been conducted and control improvements identiﬁed are in the 
process of being implemented
further steps being taken to improve key ﬁnancial controls and 
procedures during the year have included the following
• close focus on and investment in the financial control improvement 
programme established in the uk  ireland business this has 
included the restructuring of ﬁnancial roles and responsibilities  
and the establishment of a new senior management team
• introduction of a coso control framework in the uk  ireland to 
strengthen ﬁnancial controls as part of an initiative to introduce a 
groupwide coso compliance framework
• presentations on ﬁnancial controls to the audit committee from 
senior management of major businesses across the group
• establishment of documented quarterly selfcertiﬁcation at a 
business unit level to conﬁrm key ﬁnancial controls are in place  
and operating as intended
nomination committee 
the committee comprised four nonexecutive directors for the year 
ended 30 september 2011 and is chaired by sir michael hodgkinson 
the senior independent director – sir michael hodgkinson and  
clare chapman are considered to be independent by the company 
clare chapman resigned from the board on 19 october 2011 and the 
current membership is three
no major concerns were raised in the nomination committee 
effectiveness survey
in relation to the appointments of minnow powell appointed  
4 april 2011 and coline mcconville appointed 21 september 2011  
a description of the roles and required capabilities was prepared prior 
to the appointments 
an extensive search of suitable candidates was carried out by an 
external agency prior to commencing the interview process and the 
balance of skills experience independence diversity how the board 
works as a unit and the collective knowledge of the board had been 
taken into consideration when preparing a description of the role and 
the capabilities required consideration was also given to whether  
the candidates would have sufﬁcient time available to devote to their 
duties the nomination committee considered that minnow powell 
and coline mcconville would make excellent contributions to the 
deliberations of the board and that they met the independence criteria 
laid out in the provisions of the uk corporate governance code
it was felt that minnow powell’s qualiﬁcations and experience gained 
over 30 years as an auditor in an international accountancy practice 
made him an excellent candidate as a board member and also 
chairman of the audit committee
coline mcconville’s educational qualiﬁcations and operational 
experience in various senior roles over the last 20 years and as a 
nonexecutive director of hbos would also enhance the current 
skillset of the board
two meetings took place during the year – one to consider recommending 
the appointment of minnow powell as a nonexecutive director and 
the other in respect of coline mcconville a meeting to consider 
succession planning in detail – for the board and senior management 
– has been scheduled into the corporate calendar for 201112
audit committee 
from 1 october 2010 until 31 january 2011 the membership of  
the audit committee was jeremy hicks tony campbell bill dalton 
and giles thorley – all being independent nonexecutive directors 
following the resignation of jeremy hicks and giles thorley on  
31 january 2011 the committee comprised only two independent 
nonexecutive directors whilst an external search process was 
underway to ﬁnd replacement nonexecutive directors tony 
campbell undertook the role of acting chairman during this period
on 4 april 2011 minnow powell was appointed as a nonexecutive 
director and chairman of the audit committee which increased the 
membership to three the company therefore did not comply with 
the uk corporate governance code for the period 1 february to  
3 april 2011 as a minimum of three independent nonexecutive directors 
is required minnow powell is considered to be independent and the 
board is satisﬁed that he has ’recent and relevant ﬁnancial experience’
the audit committee met 14 times during the year – four of  
these meetings were speciﬁcally called to review and approve draft 
announcements results and trading statements of the company 
three meetings – two in october and one in december 2010 –  
were called to discuss ﬁnancial control issues which resulted in  
the restatement of the 2009 ﬁnancial statements
at the meeting of the nonexecutive directors in may 2011 the 
appraisal of the chairman was undertaken the chairman was not 
present for the discussion which was led by the senior independent 
director – sir michael hodgkinson 
attendance of directors at meetings of the board and its 
committees
  audit remuneration nomination
 board committee committee committee
 meetings meetings meetings meetings
horst baier nonexecutive director 77 – – –
dr volker böttcher md central europe 77 – – –
paul bowtell chief financial ofﬁcer 02 – – –
tony campbell nonexecutive director 77 1214 55 –
clare chapman nonexecutive director 57 – 55 22
bill dalton nonexecutive director 67 1314 45 –
rainer feuerhake nonexecutive director 77 – 55 22
dr michael frenzel chairman 77 – 55 22
jeremy hicks nonexecutive director 22 57 – –
sir michael hodgkinson deputy chairman  
and senior independent director 77 44 – 22
peter long chief executive 77 – – –
johan lundgren deputy chief executive 77 – – –
coline mcconville nonexecutive director 11 – – –
minnow powell nonexecutive director 33 55 – –
erhard schipporeit nonexecutive director 77 – – –
dr albert schunk nonexecutive director 77 – – –
harold sher nonexecutive director 67 – – –
giles thorley nonexecutive director 22 57 – –
will waggott chief financial ofﬁcer 77 – – –
figures in brackets indicate the maximum number of meetings during the year in which the 
individual was a board member
clare chapman was unable to attend two board meetings due  
to clashes with nhs meetings where she was director general  
of workforce
remuneration committee
see the remuneration report for full details of the remuneration 
committee its composition and work during the year
throughout the year clare chapman was chairman of the 
remuneration committee – she resigned from the board  
on 19 october 2011 and has been replaced as chairman of  
the remuneration committee by bill dalton 
no major concerns were raised in the remuneration committee 
effectiveness survey
a variety of questions and the directors were able to make additional 
comments where appropriate
the results were collated and the responses were given to the chairs 
of the audit remuneration and nomination committees and to the 
chairman of the board on an anonymous basis in september 2011 
summary reports analysing the responses by broad category and by 
reference to a trafﬁclight system showing the number of red amber 
and green scores were presented to the board for consideration and 
debate and action points were agreed
independence of nonexecutive directors
the chairman dr michael frenzel did not meet the independence 
criteria laid out in the provisions of the combined code at the  
time of his appointment this is because dr frenzel is the chief 
executive of tui ag – a 5547 shareholder of the company as at  
30 september 2011
details of the chairman’s other signiﬁcant commitments are given in 
his biography on page 47 the chairman does have a number of other 
external roles but the board is satisﬁed that these do not interfere 
with the performance of his duties as chairman of the company
of the other 10 nonexecutive directors two are not considered to 
be independent – horst baier is also an executive director of tui ag 
and rainer feuerhake was a member of tui ag’s executive board 
until his resignation in february 2010 
the nonexecutive directors considered to be independent are sir 
michael hodgkinson tony campbell bill dalton minnow powell 
coline mcconville dr erhard schipporeit dr albert schunk and 
harold sher 
the board recognises that the uk corporate governance code 
requires that at least half the board excluding the chairman  
should be independent nonexecutive directors the company  
was compliant with provision b11 of the uk corporate governance 
code throughout the year ended 30 september 2011 the board is 
committed to seek to ensure that its membership is refreshed regularly 
meetings of the nonexecutive directors
the chairman met with the nonexecutive directors three times 
during the year – two meetings in february and one in may 2011  
two meetings have been scheduled for 2012 and others will be  
held as the need arises 
tui travel plc
nomination committee remuneration committee audit committee
delegated authorities
sets remuneration and incentives for the executive 
directors approves and monitors remuneration 
and incentive plans for the group
members
bill dalton chairman
t ony campbell
dr michael frenzel
rainer feuerhake
delegated authorities
ensures that the board and committee 
composition has the optimum balance of skills 
knowledge and experience by nominating suitable 
candidates for approval by the board to fill 
executive and nonexecutive vacancies
members
sir michael hodgkinson chairman
dr michael frenzel
rainer feuerhake
delegated authorities
monitors the group’s integrity in financial 
reporting and reviews the effectiveness of 
the risk management framework
members
minnow powell chairman
t ony campbell 
bill dalton
sir michael hodgkinson
board governance structure  wwwtuitravelplccom wwwtuitravelplccom
54 tui travel plc annual report  accounts 2011 tui travel plc annual report  accounts 2011 55
group at a glance strategic overview business and ﬁnancial review shareholder information financial statements governance
governance governance
corporate governance report continued
announcement of the interim and preliminary results details of which 
together with the group’s ﬁnancial reports and other announcements 
can be accessed via the group’s website wwwtuitravelplccom
the uk corporate governance code recommends that the senior 
independent director meets with a range of major shareholders to 
gain an understanding of their views both sir michael hodgkinson 
senior independent director and clare chapman chairman of the 
remuneration committee met with major shareholders during the 
course of the year
sir michael hodgkinson met with several major shareholders in january 
2011 discussions covered the restatement of the 2009 accounts the 
selection of pricewaterhousecoopers llp as the new auditor and the 
process for appointing a new chair of the audit committee
clare chapman met with one of our major shareholders in june 2011 
the meeting was arranged at clare’s invitation following her discussion 
with investors at the agm which was held in february 2011 the meeting 
was a general exchange of views and covered a number of issues 
which were fed back to the committee
there is an opportunity for shareholders to question the chairman 
and other directors including the chairmen of the audit remuneration 
and nomination committees at the agm the agm also provides  
a forum for the nonexecutive directors to discuss the views of 
shareholders with them directly
in respect of general meetings of the company
• the company prepares separate resolutions on each substantially 
separate issue and does not combine resolutions together 
inappropriately
• proxy appointment forms provide shareholders with the option to 
vote for against or to withhold their vote the proxy form makes it 
clear that a ‘vote withheld’ is not a vote in law and will not be counted
• all postal proxy votes are returned to equiniti the company’s 
registrar which is responsible to for ensuring votes are properly 
received and counted
• proxy counts are displayed at the close of the agm and the results 
posted on the company’s website wwwtuitravelplccom following 
the closure of the meeting
• the annual report  accounts is laid before shareholders at the agm 
uk corporate governance code provisions
for the reasons disclosed within this annual report during the year 
the company did not fully comply with the following provisions
• code provision a22 the chairman should on appointment meet 
the independence criteria set out in code a31 see page 52 
• code provision b21 the majority of members of the nomination 
committee should be independent nonexecutive directors sir 
michael hodgkinson and clare chapman are considered to be 
independent but dr michael frenzel and rainer feuerhake are not 
for the reasons given on page 52
• code provision c31 the board should establish an audit 
committee of at least three or in the case of smaller companies 
two independent nonexecutive directors see page 53
• code provision d21 if the company chairman is a member of the 
remuneration committee he must be considered independent on 
appointment see page 52
andrew john
company secretary
4 december 2011
antibribery and corruption 
the tui travel group code of conduct the code which was ﬁrst 
published in august 2008 made it clear that the group will not 
tolerate any type of corruption or bribery whether public private 
active or passive
the group’s policy was further ampliﬁed in july 2011 when a detailed 
policy on procedures for the prevention of bribery and corruption  
the antibribery policy was issued to all employees worldwide and 
posted on the group intranet to take account of the provisions of the 
bribery act 2010
great importance is attached to adherence with the antibribery 
policy and therefore extensive training is taking place throughout  
the group this training is delivered by a combination of internet 
exercises and interactive presentations which often make use of  
a speciallyproduced inhouse ﬁlm using professional actors the  
ﬁlm tracks a ﬁctitious hotel construction and contracting project  
in a mediterranean country and is designed to be paused at various 
points to provide interactive discussion it has proven to be far more 
memorable than more conventional slide presentations
to date training has been received by the board the gmb the 
grmc most of the sector boards and all inhouse counsel training 
continues to cascade down to all relevant managers and to other 
colleagues whose roles make it particularly important for them to 
understand the law and the antibribery policy
whistleblowing 
there are policies and procedures for the reporting by employees  
and the resolution of suspected fraudulent activities it is the policy of 
the group to employ staff and management of high integrity to train 
them appropriately and to require compliance with all relevant laws 
regulations and internal policies 
for all employees on a uk contract approximately 18000 and for 
almost 6000 german colleagues together representing approximately 
50 of all employees across the group conﬁdential employee 
hotlines are in place using third party providers employees can  
make conﬁdential reports about any issues they would like to raise 
plans are in place to make whistleblowing hotlines available where 
the law permits to all group employees by the end of the calendar 
year 2012 however irrespective of whether hotlines are available  
all employees are aware of the provisions in the tui travel code of 
conduct the code which encourages them to report any lack of 
compliance with the code to their immediate supervisor or other 
suitable group function the code makes it clear that nobody who 
provides information with honest intentions need fear any adverse 
consequences even if the information proves to be unfounded 
the operators of hotlines report calls to nominated recipients in the 
group audit services department who review these and investigate 
them as appropriate in the ﬁnancial year a total of 34 calls were 
made the majority of which resulted in internal investigations within 
its regular report to the audit committee group audit services 
provides a summary of any conﬁdential reports received and actions 
taken a monthly report is also produced which includes a summary  
of all calls received highlighting any issues raised
communication with shareholders
the chief executive chief financial ofﬁcer and members of  
the investor relations’ team hold regular meetings with major 
shareholders to review the group’s performance and prospects  
the views of shareholders are communicated to all members of  
the board following such meetings during the course of these 
meetings the issue of governance is discussed presentations to  
major shareholders are made at least twice yearly after the 
• the group audit services function reviews independently the 
existence and adequacy of controls implemented by management 
and reports its ﬁndings regularly to the audit committee
• the audit committee reviews the proposed work plans of the 
group audit services function reports issued by group audit 
services progress made on addressing ﬁndings arising from  
these reports as well as reports on systems and controls from  
the external auditor covering material weaknesses the chairman 
of the audit committee reports to the board on the outcome of 
the audit committee meetings held and the board receives the 
minutes of all such meetings
• the treasury position of the group including cash foreign 
exchange and fuel hedging exposure is managed centrally in 
accordance with policies appropriate for each sector and is the 
responsibility of the chief financial ofﬁcer and group treasurer 
• financial forecasts providing predicted results with sensitivity 
analysis are prepared routinely throughout the year for review  
by the gmb and the board these forecasts also include details  
of the group’s ongoing compliance with its regulatory and  
banking requirements 
• the group has established investment appraisal and authorisation 
procedures and its capital expenditure is reviewed against budgets 
which have been approved by the board
processes are in place to ensure appropriate action is taken where 
necessary to remedy any deﬁciencies identiﬁed through the group’s 
internal control and risk management processes
group risk management committee grmc
the grmc is chaired by the chief executive and comprises members 
of the gmb the director of group audit services  risk the director 
of financial control and the chief information ofﬁcer meetings of  
the grmc are held at least twice a year and membership is  
reviewed annually 
the grmc’s core duties are to assist the board in fulﬁlling its 
responsibilities through
• providing an oversight of the framework for managing risk 
throughout the group 
• reviewing the effectiveness of the group’s risk management 
framework and internal control systems for managing risk
• determining the nature and extent of the signiﬁcant risks the  
group is willing to take
• monitoring performance and changes in the group risk proﬁle
• identifying the most signiﬁcant risks to the group and agreeing 
responsibility for appropriate mitigating strategies
enterprisewide risk management erm
the objective of the framework is to improve operational performance 
reduce losses and to protect and enhance shareholder value in the 
pursuit of the group’s strategic goals 
the group considers four types of risk when identifying potential 
events that could affect the delivery of business objectives and 
strategic goals risks are considered in the context of longer term 
strategic and emerging threats medium term challenges associated 
with business change programmes shorter term risks triggered by 
changes in the external and regulatory environment and shorter  
term risks in relation to internal operations and control
there is regular reporting to the board through the audit committee 
on key erm activities undertaken by group risk management and the 
status of the risk management process
• establishment of a group finance compliance team to verify the 
selfcertiﬁcation returns and support the various businesses in 
strengthening ﬁnancial control
• review of the numbers and quality of ﬁnancial management across 
the group supported by an external consultancy company and the 
establishment of a ﬁnance academy as part of a continuing 
commitment to competence
• establishment of a ‘finance auditable universe’ to ensure that 
decisions as to what should be audited are taken in the context  
of a complete knowledge of what could be audited
• improved monitoring of the timely closure of audit recommendations
audit committee effectiveness review
at the meeting of the board in september 2011 the points raised as a 
result of the review were considered in detail and action points agreed
internal control and risk
the board has overall responsibility for the group’s system of  
internal control and for reviewing its effectiveness whilst the role  
of management is to implement board policies on risk and control 
the systems of internal control and risk management have been 
developed to ensure compliance with the uk corporate governance 
code on internal control and risk management
the board has delegated the daytoday management of the 
company to the chief executive and through him to the other 
executive directors and the group management board gmb the 
system of internal control is designed to manage and mitigate rather 
than eliminate the risk of failure to achieve business objectives in 
pursuing these objectives internal controls – which include ﬁnancial 
operational and compliance controls – and risk management can only 
provide reasonable and not absolute assurance against material 
misstatement or loss the board has reviewed the effectiveness  
of internal controls during the year
the board conﬁrms that
• there is an ongoing process for identifying evaluating and 
managing the signiﬁcant risks faced by the group 
• this has been in place for the year under review and up to the  
date of approval of the annual report  accounts 
• the process is regularly reviewed by the board 
• the process accords with the uk corporate governance code 
the key elements of the existing control framework and review 
processes in place across the group are as follows 
• the board sets corporate strategy and business objectives the 
gmb and sector management integrate these objectives into their 
operational and ﬁnancial business plans 
• the gmb meets regularly together with other senior executives to 
consider group operational and ﬁnancial performance and business 
development the chief executive reports to the board on behalf  
of the gmb on signiﬁcant changes in the business and the external 
environment the chief financial ofﬁcer provides the board with 
ﬁnancial information which includes key performance and risk indicators
• the group operates an enterprisewide risk management erm 
process which is integrated within the short and long term business 
planning processes see below
• the board believes that in order to be effective risk management 
processes must be driven down to each operating unit accordingly 
each sector board now addresses risk management as a standing 
agenda item and is responsible for ensuring that the risks facing 
that sector’s businesses are identiﬁed and that related action plans 
are implemented  wwwtuitravelplccom wwwtuitravelplccom
56 tui travel plc annual report  accounts 2011 tui travel plc annual report  accounts 2011 57
group at a glance strategic overview business and ﬁnancial review shareholder information financial statements governance
governance
in accordance with a decision taken by the committee based upon  
the economic climate executive directors’ base salaries were not 
increased at the normal annual review in october 2009 october 2010 
or october 2011 however to reﬂect performance and promotion 
during the year the committee does anticipate undertaking a review 
for selected directors prior to 31 december 2011 
beneﬁts are provided to executive directors in accordance with the 
practice applying to other executives in their geographic location 
annual performance bonus 
within the annual bonus plan challenging performance goals are set 
and these must be achieved before the maximum bonus becomes 
payable below a set threshold level no bonus is payable and at a 
target level half of the maximum is payable to exceed the threshold 
level performance of at least 90 of the level required for the target 
award is required the annual bonus plan measures are weighted 
heavily to the group’s ﬁnancial performance and the balance to 
personal objectives the maximum bonus opportunity for each 
executive director varies by individual the range is 120 to 175  
of annual base salary the chart below provides further detail in 
respect of the bonus measures and weightings for the current year
full year profit and cash flow measure
cash headroom at the cycle low point
personal strategic objectives
 
long term incentives 
deferred annual bonus scheme 
all executive directors participate in the dabs which requires a 
minimum of 25 and a maximum of 50 of any annual performance 
bonus award to be deferred into sharebased awards matching 
sharebased awards may also be made up to four times the deferred 
amount and are subject to the achievement of stretching performance 
conditions over a threeyear period awards of deferred and matching 
sharebased awards are subject to forfeiture conditions until the 
release date the earliest point at which the shares are eligible  
for release is at the end of three years following deferral before  
1 october 2011 awards consist of conditional shares and it is intended 
that awards made after 1 october 2011 will consist of nil cost options
for awards of matching shares made during the year no shares will 
vest unless the annual average of the ratio of the group’s return  
on invested capital roic to the weighted average cost of capital 
wacc meets or exceeds one over the threeyear period a hurdle  
of roic being at least equal to wacc is used to ensure that the 
relevant long term incentive awards pay out only when shareholder 
value is being created over the performance periods if the roic
wacc hurdle is met shares will only vest to the extent to which two 
further performance conditions are satisﬁed over the threeyear 
period as follows 
governance
remuneration report
the group has performancerelated reward policies these  
are designed to provide the appropriate balance between ﬁxed 
remuneration and variable ‘atrisk’ reward which is linked to  
the performance of both the group and the individual group 
performancerelated measures are chosen carefully to ensure  
a strong link between reward and true underlying ﬁnancial 
performance individual performance is measured through an 
assessment of comprehensive business unit deliverables modelling 
the group’s values and the achievement of speciﬁc objectives at a 
minimum the individual performance of the executive directors is 
assessed on an annual basis 
in assessing levels of pay and beneﬁts tui travel compares the 
packages offered by different groups of comparator companies 
these groups are chosen having regard to 
• financial size – turnover proﬁts and market capitalisation 
• scale of business – the number of people employed 
• diversity and complexity of businesses 
• geographical spread of businesses 
• industry type 
•  relevance as  
– a potential source for candidates for roles within the group and  
– a potential threat in respect of attracting tui travel executives 
external consultants are used to advise the committee on the 
structure and level of pay and beneﬁts in tui travel’s markets 
the normal policy for executive directors is that using ‘target’  
or ‘expected value’ calculations long term performance drives  
60 of total annual remuneration excluding beneﬁts and the  
total proportion of performancerelated remuneration including 
annual bonus is 70 as shown in the chart below
fixed remuneration
annual incentive
long term incentive
 
the main components of remuneration in the company are 
• fixed remuneration  
– base salary  
– beneﬁts  
– pension contribution 
• performancerelated remuneration  
– annual bonus  
– long term incentives 
base salary 
the salary for each executive director is based on individual 
performance and on information from independent professional 
sources on the salary levels for similar jobs in groups of comparable 
companies this approach is consistent with that used to determine 
salary and beneﬁt levels for all employees within the group internal 
relativities and salary levels in the wider employment market are also 
taken into account 
material advice or services were provided to the committee during 
the year by 
deloitte llp deloitte
herbert smith llp herbert smith
peter long – chief executive
bill logan – advisor to the gmb
jacky simmonds – group human resources director
david house – group reward director
jacky simmonds has direct access to the chairman of the committee 
and together with david house they advised the committee on all 
aspects of the group’s reward policies and structures during the year 
ensuring a greater balance between payment relating to control as 
well as performance peter long attends meetings of the committee 
to make recommendations relating to the performance and remuneration 
of his direct reports and andrew john company secretary acts as 
secretary to the committee peter long jacky simmonds and andrew 
john are not in attendance when their own remuneration is considered 
deloitte an external consultancy organisation provided independent 
advice on all aspects of senior management remuneration deloitte 
also provides salary benchmarking information and tax services to the 
group from timetotime and veriﬁcation of the relative performance 
conditions attached to the performance share plan psp and deferred 
annual bonus scheme dabs 
herbert smith llp advised on various legal issues relating to the 
company’s share schemes and also provides other legal services to 
the group 
policy on remuneration of nonexecutive directors 
nonexecutive directors including the chairman do not have service 
contracts and do not participate in the group’s pension scheme 
annual bonus scheme or long term incentive schemes nonexecutive 
directors have second term letters of appointment which can be 
terminated by either party serving three months’ notice with the 
exception of horst baier whose initial appointment letter has not  
yet expired and in common with all initial term letters provides for  
six months’ notice in accordance with the requirements of the uk 
corporate governance code all directors will be subject to reelection 
at the agm to be held on 7 february 2012 
nonexecutive directors are paid a fee which is approved by the 
board on the recommendation of the executive directors having 
taken account of the fees paid in other companies of a similar 
complexity and the skills and experience of the individuals the base 
fee for the nonexecutive directors is £55000 but the chairman  
and deputy chairman who is also the senior independent director 
are paid higher fees to reﬂect their additional responsibilities the 
chairman receives a fee of £300000 and the deputy chairman 
receives a fee of £200000 the chairman of the audit committee and 
the chairman of the remuneration committee receive an additional 
fee of £15000 and £10000 respectively 
policy on remuneration of executive directors and 
senior executives 
the committee aims to ensure that remuneration packages are 
offered which 
• set the total remuneration package at an appropriate level to 
reﬂect the competitive market in which the group operates 
• link a substantial proportion of the total remuneration package  
to the achievement of demanding ﬁnancial performance targets 
• structure the reward of senior management to align their interests 
with those of the shareholders over the long term 
• reinforce the high performance culture throughout the group 
the remuneration committee the committee formulates and 
applies the company policy with consideration to the prevailing 
economic climate in the major economies within which the group 
operates and within the spirit of its core values which cultivate 
responsible leadership in the external and internal social environment 
consequently the committee closely considers the company’s 
performance in building both shareholder value and a secure future 
for all stakeholders
this report has been prepared by the committee and has been 
approved by the board it complies with schedule 8 of the large  
and medium sized companies and groups accounts and reports 
regulations 2008 this report will be presented to shareholders  
for approval at the annual general meeting agm to be held on  
7 february 2012 
remuneration committee 
during the year the committee comprised the following  
nonexecutive directors 
clare chapman – chairman
tony campbell
bill dalton
dr michael frenzel
rainer feuerhake
three of the members of the committee are independent non
executive directors dr michael frenzel and rainer feuerhake are  
not considered by the company to be independent dr frenzel is  
a member of the executive board of tui ag and rainer feuerhake 
was a member of tui ag’s executive board until his resignation in 
february 2010 tui ag is a 5547 5083 on a fullydiluted basis 
shareholder of tui travel plc as at 30 september 2011 and their 
appointments are pursuant to the relationship agreement between 
tui ag and the company 
clare chapman resigned from the board on 19 october 2011 and  
bill dalton has been appointed chairman of the remuneration 
committee in her place sir michael hodgkinson was also appointed 
as an additional member of the committee on 19 october 2011 and 
coline mcconville was appointed to the committee on 2 december 2011
no member of the committee has any personal ﬁnancial interest 
other than as a shareholder as disclosed in the interests in shares 
table on page 65 in the matters to be decided by the committee 
the three independent members of the committee have no conﬂicts 
of interest arising from committee members’ crossdirectorships  
and none of the members of the committee participate in any  
bonus schemes pension plans share awards or any employee share 
schemes in respect of the company members of the committee  
have no daytoday involvement in the running of the company 
the committee met ﬁve times during the year bill dalton was unable 
to attend on one occasion due to prior commitments 
the committee advises the board on overall remuneration policy  
the committee also determines on behalf of the board and with  
the beneﬁt of advice from external consultants and members of the 
human resources department the remuneration of the executive 
directors and other members of the group management board 
gmb the activities of the committee are governed by its terms  
of reference which have been approved by the board and can be 
found on the tui travel website at wwwtuitravelplccom wwwtuitravelplccom wwwtuitravelplccom
58 tui travel plc annual report  accounts 2011 tui travel plc annual report  accounts 2011 59
group at a glance strategic overview business and ﬁnancial review shareholder information financial statements governance
governance
contracts of service 
executive directors 
the remuneration committee’s policy is for executive directors to 
have rolling contracts with a 12month notice period 
volker böttcher peter long johan lundgren and william waggott 
currently have service agreements with a 12month notice period and 
it is intended that all new appointments will also have 12month notice 
periods however on occasion to complete an external recruitment 
successfully a longer initial period may be used reducing to 12 months 
following guidance in the uk corporate governance code 
no provisions for compensation for termination following change  
of control or for liquidated damages of any kind are included in the 
current directors’ contracts in the event of any early termination  
of an executive director’s contract the policy is to seek to minimise 
any liability
executive director effective date of contract notice period
dr volker böttcher 5 september 2007 12
peter long 19 february 2008 12
johan lundgren 20 march 2009 12
william waggott 22 april 2008 12
nonexecutive directors
nonexecutive director effective date of appointment notice period
horst baier 13 october 2009 6
tony campbell 3 september 2010 3
clare chapman 3 september 2010 3
bill dalton 3 september 2010 3
rainer feuerhake 3 september 2010 3
dr michael frenzel 3 september 2010 3
sir michael hodgkinson 3 september 2010 3
coline mcconville 21 september 2011 3
minnow powell 4 april 2011 3
dr erhard shipporeit 29 october 2010 3
dr albert schunk 29 october 2010 3
harold sher 29 october 2010 3
the information provided in the following pages of this report has 
been audited by pricewaterhousecoopers llp
policy on external appointments 
the company recognises that its directors may be invited to become 
nonexecutive directors of other companies and that those such 
appointments can broaden experience and knowledge and beneﬁt the 
business subject to the approval of the board executive directors 
are therefore allowed to accept nonexecutive appointments and  
to retain the fees received excluding positions where the director  
is appointed as the company’s representative as long as this is not 
likely to lead to a conﬂict of interest 
for the year ended 30 september 2011 peter long received and 
retained nonexecutive directors’ fees in respect of an appointment 
with rentokil initial plc ftse 100 of £75000 2010 £75000  
for the period 1 october 2010 to 31 december 2010 paul bowtell 
received and retained nonexecutive director fees in respect of his 
two appointments – capita group plc ftse 100 and sthree plc  
a small cap company – of £15000 2010 £15682 and £10000 
2010 £40000 respectively 
performance graph 
tui travel plc shares were listed on the london stock exchange  
on 3 september 2007 from december 2007 until june 2011 the 
company was a member of the ftse 100 index the graph below 
measures the performance of first choice holidays plc up to the 
merger and subsequently the performance of tui travel plc assuming 
dividends are reinvested compared with the tsr performance achieved 
against an index of 23 international travel and leisure companies the 
latter index is considered to be the most appropriate benchmark for 
comparison purposes and will in future be used within the performance 
measures of the company’s long term incentive schemes 
the constituents of the index are
aer lingus group finnair pricelinecom
air berlin firstgroup royal caribbean cruises
air franceklm flight centre ryanair holdings
carnival hertz global holdings stagecoach group
club mediterranee kuoni reisen ‘r’ thomas cook group
deutsche lufthansa national express tui travel
easyjet norwegian air shuttle wotifcom holdings
expedia pierre  vacances
awards under the psp lapse if the performance conditions are not met
the dabs and psp schemes have been amended going forward 
rewards to employees will be more closely aligned with their 
contribution to the performance of the group for future awards 
under both the dabs and psp schemes it is intended that
• up to half of the nil cost options over shares will become 
exercisable based on growth in the group’s eps as reported  
in relation to the growth in the uk rpi the level of growth 
required will remain unchanged
• up to one quarter of the nil cost options over shares will become 
exercisable based on the group’s tsr performance relative to an 
index of 23 international travel and leisure companies see opposite 
for constituents as shown in the table below
tsr per annum proportion of nil cost options exercisable
below index 0
between index and index 8 on a straight line basis  
 between 15 and 100
at or above index 8 100
• up to one quarter of the nil cost options over shares will become 
exercisable based on the improvement in the group’s roic over 
the performance period as determined by the committee prior  
to each award
allemployee share schemes 
executive directors based in the uk are eligible to participate in  
the hmrcapproved share incentive plan which is an allemployee 
share scheme enabling staff to acquire shares in the company on 
preferential terms to further encourage employee shareholding in 
the company the share incentive plan provides a matching share for 
every four shares bought by a participant under the plan matching 
shares are not subject to performance conditions 
shareholding guidelines 
the executive directors will be expected to build within ﬁve years of 
their appointment and then maintain a shareholding equal in value to 
15 times their basic salary or two times in the case of the chief executive 
no new shares were issued during the year and therefore the 
company has remained within its headroom limits for the issue of 
new shares under share incentive schemes all share incentive awards 
made and all future share incentive awards will normally be settled 
with shares purchased in the market 
policy on pensions 
each of the ukbased executive directors and senior executives 
participates in a deﬁned contribution retirement or long term 
investment scheme 
the group’s pension policy is that in the event that a participant  
in a registered pension scheme may reach or exceed hmrc lifetime  
or annual thresholds and therefore chooses not to accept further 
registered pension contributions a contribution to an unregistered 
long term investment scheme or a nonpensionable cash payment 
equivalent to the group’s contribution to the registered pension 
scheme will be offered in lieu pension scheme participants will not  
be compensated for any adverse tax consequences of exceeding the 
hmrc lifetime allowance limit 
executive directors and senior executives outside of the uk 
participate in local pension plans 
• up to three quarters of the matching shares will vest based on 
growth in the group’s earnings per share eps before amortisation 
of goodwill and merger intangibles goodwill impairment and 
separately disclosed items in relation to the growth in the uk 
retail price index rpi as shown in the table below 
average annual eps growth in excess of rpi growth proportion of matching shares vesting 
below 4 0
between 4 and 13 on a straight line basis  
 between 10 and 100
13 or above 100
• up to one quarter of the matching shares will vest based on the 
group’s ranking of total shareholder return tsr performance 
relative to companies ranked 30th to 100th by market capitalisation 
as at the date of the award as shown in the table below 
tsr ranking proportion of matching shares vesting 
below median 0
between median and upper quartile on a straight line basis  
 between 15 and 100
at or above upper quartile 100 
matching share awards lapse if the performance conditions are  
not met 
performance share plan 
the psp allows executive directors and eligible participants  
to receive sharebased awards subject to the satisfaction of 
performance conditions set by the committee which are normally 
measured over a threeyear period once vested psp sharebased 
awards are subject to forfeiture conditions until the release date  
the earliest point at which the shares are eligible for release is the 
third anniversary of the award date before 1 october 2011 awards 
consist of conditional shares and it is intended that awards made  
after 1 october 2011 will consist of nil cost options
for awards made during the year no shares will vest unless the  
annual average of the ratio of the group’s roic to the wacc  
meets or exceeds one over the threeyear period if the roicwacc 
hurdle is met shares will only vest to the extent to which two further 
performance conditions are satisﬁed over the threeyear period  
as follows 
• up to half of the shares will vest based on growth in the group’s 
eps before amortisation of acquisition intangibles goodwill 
impairment and separately disclosed items in relation to the 
growth in the uk rpi as shown in the table below 
average annual eps growth in excess of rpi growth proportion of shares vesting 
below 4 0
between 4 and 13 on a straight line basis  
 between 10 and 100
13 or above 100
• up to half of the matching shares will vest based on the group’s 
ranking of tsr performance relative to companies ranked 30th to 
100th by market capitalisation as at the date of the award as shown 
in the table below 
tsr ranking proportion of matching shares vesting 
below median 0
between median and upper quartile on a straight line basis  
 between 15 and 100
at or above upper quartile 100 
governance
remuneration report continued
tui t ravel plc
ftse 100
ftse 250
international travel and leisure group
source datastream
tui travel plc
total shareholder return
200
150
100
50
tui travel plc shares
listed 03 sept 2007
30 sept
2006
30 sept
2007
30 sept
2008
30 sept
2009
30 sept
2010
30 sept
2011 wwwtuitravelplccom wwwtuitravelplccom
60 tui travel plc annual report  accounts 2011 tui travel plc annual report  accounts 2011 61
group at a glance strategic overview business and ﬁnancial review shareholder information financial statements governance
governance
pension contributions for directors 
 pension contributions or allowance  
 for the year ended 30 september 2011
executive director £000
dr volker böttcher 117
paul bowtell¹ 374
peter long 425
johan lundgren 200
william waggott 158
total 1274
1  in addition to regular pension contribution for the period up to cessation of employment 
on 31 december 2010 mr bowtell also received a oneoff payment of £343000 in lieu of  
a deferred share award for the ﬁnancial year ended 30 september 2010
total pension contributions or allowances for the year ended  
30 september 2011 were £1274m in calculating this total payments 
made in eur have been converted at 116 to 1 gbp being the average 
exchange rate for the year ended 30 september 2011 
long term incentives 
deferred annual bonus scheme dabs 
messrs böttcher long lundgren and waggott participated in the 
dabs during the year ended 30 september 2011 and are expected  
to receive an award by 9 december 2011 as follows 
 estimated value of award
executive director £000
dr volker böttcher 282
peter long 744
johan lundgren 363
william waggott 343
total 1732
awards made under the dabs and which remain outstanding at  
30 september 2011 are given in the table on page 62
directors’ pensions 
during the year a contribution equal to 50 and 33 of base salary 
was made into the tui travel international retirement saving plan a 
deﬁned contribution scheme for the beneﬁt of peter long and johan 
lundgren respectively a contribution equal to 25 of base salary pro 
rata was made into a deﬁned contribution pension scheme for the 
beneﬁt of paul bowtell prior to the termination of his employment  
on 31 december 2010 
a contribution of 33 of base salary was made partly into a deﬁned 
contribution scheme and partly into the tui travel international 
retirement saving plan for the beneﬁt of william waggott 
in addition william waggott has deferred pension entitlements  
under the deﬁned beneﬁt section of the tui pension scheme uk 
he ceased to be an active member of the deﬁned beneﬁt section  
on 3 september 2007 and therefore no increase in accrued beneﬁt  
has occurred during the year additional information is as follows 
• the accrued beneﬁts including deferred revaluation to  
30 september 2011 are a pension of £5518136 per annum  
payable from age 60
• the transfer value as at 30 september 2011 calculated on the 
current basis is £1164159
• the transfer value as at 30 september 2010 calculated on the  
basis in place at the time is £1139263
• the only change in accrued beneﬁts over the ﬁnancial year is 
another year of deferred revaluation at ﬁxed 5 per annum  
the accrued beneﬁts at the start of the year were £5255367  
per annum so there has been an increase in pension of £262769 
per annum over the year
• there have been no contributions by mr waggott over the ﬁnancial 
year the change in transfer value is £24896
in the event of death in service the executive directors’ and  
senior executives’ pension arrangements provide lump sums for  
the purchase of dependants’ pensions of the greater of eight times 
salary or the value of the pension fund in addition to which a lump 
sum of four times salary is payable following the changes to the  
tax rules from april 2006 any dependant’s pension may be paid  
as an additional lump sum subject to hmrc limits 
dr volker böttcher participates in separate pension arrangements  
in germany at a cost of 25 of base salary 
directors’ remuneration 
    total
    
       for the for the
   basic    year ended year ended
   salaries annual  severance 30 september 30 september
   and fees bonus¹ beneﬁts² payments 2011 2010
   £000 £000 £000 £000 £000 £000
executive directors
dr volker böttcher
3
   470 282 17  769 827
paul bowtell
4
   123  5 745 873 1012
peter long   850 744 24  1618 2066
johan lundgren
7
   605 363 69  1037 1406
william waggott
5
   487 343 18  848 1115
nonexecutive directors
horst baier   55    55 55
tony campbell   55    55 55
clare chapman   65    65 65
bill dalton   55    55 55
rainer feuerhake   55    55 55
dr michael frenzel chairman   300    300 300
jeremy hicks
6
   23   18 41 70
sir michael hodgkinson deputy chairman   200    200 200
coline mcconville   2    2 
minnow powell   35    35 
dr erhard schipporeit   55    55 55
dr albert schunk   55    55 55
harold sher   55    55 55
giles thorley
6
   18   14 32 55
total   3563 1732 133 777 6205 7501
1  ‘annual bonus’ ﬁgures include bonus awards in cash in respect of participation in the annual bonus plan but exclude bonus awards in deferred shares details of which are set out on page 62 
messrs böttcher long lundgren and waggott achieved the maximum level for the annual bonus
2  ‘beneﬁts’ incorporate all tax assessable beneﬁts arising from the individual’s employment for messrs bowtell long and waggott this relates in the main to the provision of a fully expensed 
company car or car allowance and private healthcare cover and for mr böttcher the provision of a fully expensed company car or car allowance in addition to the provision of a fully expensed 
company car or car allowance and private healthcare cover mr lundgren received education beneﬁts and tax assistance as part of the ongoing support relating to his relocation to the uk 
from sweden on 1 august 2009
3  in calculating remuneration for mr böttcher payments made during the year in eur have been converted at 116 to 1 gbp being the average exchange rate for the period 1 october 2010 to 
30 september 2011
4  mr bowtell ceased employment on 31 december 2010 in addition to his normal basic salary and beneﬁts up to his cessation date he received the cash equivalent of his unexpired notice 
period paid monthly and subject to mitigation
5  on 1 december 2010 mr waggott’s salary increased from £470000 to £490000 as a result of his appointment as chief financial ofﬁcer
6  mr hicks and mr thorley both ceased employment as nonexecutive directors on 31 january 2011 they both received three months’ pay in lieu of notice 
7 on 20 october 2011 mr lundgren was promoted to the role of deputy chief executive and received a corresponding base salary increase to £700000 per annum 
governance
remuneration report continued wwwtuitravelplccom wwwtuitravelplccom
62 tui travel plc annual report  accounts 2011 tui travel plc annual report  accounts 2011 63
group at a glance strategic overview business and ﬁnancial review shareholder information financial statements governance
governance
1  this award is the deferred element of the annual bonus entitlement for financial year 200607 and is subject only to continued employment to the release date
2  this matching award is based on a performance to 30 september 2010 where the performance measure relates to eps growth in excess of the rate of inﬂation and b performance to the 
third anniversary of the award date where the performance measure relates to the company’s tsr ranking against the constituent companies of the ftse 100 index ranked 30 to 100 by 
market capitalisation as calculated at the award date a performance hurdle of the return on roic being in excess of the wacc must also be achieved for any of the award to be released  
the number of shares released is graded according to a eps growth with 75 of the award being released for 12 in excess of inﬂation and 75 of the award released for 39 in excess of 
inﬂation and b ranking of the company against the comparator group with 375 of the award being released for median and 25 of the award being released for upper quartile the roic
wacc hurdle was achieved eps growth was greater than 39 in excess of inﬂation and the tsr ranking was below median therefore 75 of the award was released with the remainder of 
the award being forfeit
3  this award is the deferred element of the annual bonus entitlement for financial year 200708 and is subject only to continued employment to the release date
4  this matching award is based on a performance to 30 september 2011 where the performance measure relates to eps growth in excess of the rate of inﬂation and b performance to the 
third anniversary of the award date where the performance measure relates to the company’s tsr ranking against the constituent companies of the ftse 100 index ranked 30 to 100 by 
market capitalisation as calculated at the award date a performance hurdle of the return on roic being in excess of the wacc must also be achieved for any of the award to be released  
the number of shares released is graded according to a eps growth with 75 of the award being released for 12 in excess of inﬂation and 75 of the award released for 39 in excess  
of inﬂation and b ranking of the company against the comparator group with 375 of the award being released for median and 25 of the award being released for upper quartile 
5  this award is the deferred element of the annual bonus entitlement for financial year 200809 and is subject only to continued employment to the release date
6  this matching award is based on a performance to 30 september 2012 where the performance measure relates to eps growth in excess of the rate of inﬂation and b performance to the 
third anniversary of the award date where the performance measure relates to the company’s tsr ranking against the constituent companies of the ftse 100 index ranked 30 to 100 by 
market capitalisation as calculated at the award date a performance hurdle of the return on roic being in excess of the wacc must also be achieved for any of the award to be released  
the number of shares released is graded according to a eps growth with 75 of the award being released for 12 in excess of inﬂation and 75 of the award released for 39 in excess  
of inﬂation and b ranking of the company against the comparator group with 375 of the award being released for median and 25 of the award being released for upper quartile 
7  this award is the deferred element of the annual bonus entitlement for financial year 200910 and is subject only to continued employment to the release date
8  this matching award is based on a performance to 30 september 2013 where the performance measure relates to eps growth in excess of the rate of inﬂation and b performance to the 
third anniversary of the award date where the performance measure relates to the company’s tsr ranking against the constituent companies of the ftse 100 index ranked 30 to 100 by 
market capitalisation as calculated at the award date a performance hurdle of the return on roic being in excess of the wacc must also be achieved for any of the award to be released  
the number of shares released is graded according to a eps growth with 75 of the award being released for 12 in excess of inﬂation and 75 of the award released for 39 in excess  
of inﬂation and b ranking of the company against the comparator group with 375 of the award being released for median and 25 of the award being released for upper quartile 
9  during financial year 200910 these directors and the company agreed to enter into a joint election pursuant to section 4311 of the income tax earnings and pensions act 2003 in respect 
of this award consequently the remuneration committee agreed to vest this award early and release sufﬁcient shares to satisfy the tax liability arising from the joint election the remaining 
shares were held as restricted shares subject to clawback conditions and were released after the third anniversary of the award date in accordance with the scheme rules
10  during financial year 200910 these directors and the company agreed to enter into a joint election pursuant to section 4311 of the income tax earnings and pensions act 2003 in respect 
of this award consequently the remuneration committee agreed to vest this award early and release sufﬁcient shares to satisfy the tax liability arising from the joint election the remaining 
shares which are vested are held as restricted shares subject to clawback conditions and will not be released before the third anniversary of the original award date in accordance with the 
scheme rules
11  paul bowtell ceased employment with effect from 31 december 2010 under the terms of his departure and in accordance with the scheme rules these deferred awards will be released in 
full subject to any clawback conditions after the third anniversary of the award date
12  paul bowtell ceased employment with effect from 31 december 2010 under the terms of his departure and in accordance with the scheme rules these matching awards were subject to  
prorating on the basis of the time elapsed from award date to cessation of employment as compared with 36 months with the remainder of the award being forfeit
deferred annual bonus scheme dabs
  dabs   dabs    dabs     maximum
  shares   shares    shares     value
  awarded   vested    released    maximum based on
 dabs during   during    during    dabs share
 shares the year  market the year market  planned the year market   shares price of 
 held at ended  price per ended price per market actual ended price per market  held at 1493p at
 1 oct 30 sept award share at 30 sept share at value at vesting 30 sept share at value at release 30 sept 30 sept
directors 2010 2011 date award 2011 vesting vesting £ date 2011 release release £ date 2011 2011 £
dr volker 60432
1
  191207 27040p 60432 24910p 150536 291210 60432 24910p 150536 291210 – –
böttcher 241729
2
  191207 27040p 181296 24910p 451608 291210 181296 24910p 451608 291210 – –
 104809
3
  281108 20525p    281111     104809 156480
 419236
4
  281108 20525p    281111     419236 625919
 101819
5
  021209 24330p    021212     101819 152016
 407276
6
  021209 24330p    021212     407276 608063
  121568
7
 061210 22900p    061213     121568 181501
  486272
8
 061210 22900p    061213     486272 726004
total 1335301 607840       241728  602144  1640980 2449983
paul bowtell 39883
1 9
  191207 27040p    021209 39883 23730p 94642 201210 – –
 270394
2
  191207 27040p 202795 24910p 505162 291210 202795 24910p 505162 291210 – –
 79337
3 10
  281108 20525p    021209     79337
11
 118450
 537880
4
  281108 20525p    281111     388468
12
 579983
 71294
5 10
  021209 24330p    021209     71294
11
 106442
 483352
6
  021209 24330p    021212     174543
12
 260593
total 1482140        242678  599804  713642 1065468
peter long 81589
1 9
  191207 27040p    021209 81589 23730p 193611 201210 – –
 553150
2
  191207 27040p 414862 24910p 1033421 291210 414862 24910p 1033421 291210 – –
 172472
3 10
  281108 20525p    021209     172472 257501
 1169304
4
  281108 20525p    281111     1169304 1745771
 154592
5 10
  021209 24330p    021209     154592 230806
 1048088
6
  021209 24330p    021212     1048088 1564795
  324781
7
 061210 22900p    061213     324781 484898
  1299124
8
 061210 22900p    061213     1299124 1939592
total 3179195 1623905       496451  1227032  4168361 6223363
johan lundgren 39784
1 9
  191207 27040p    021209 39784 23730p 94407 201210 – –
 269723
2
  191207 27040p 202292 24910p 503909 291210 202292 24910p 503909 291210 – –
 79913
3 10
  281108 20525p    021209     79913 119310
 541784
4
  281108 20525p    281111     541784 808884
 62459
5 10
  021209 24330p    021209     62459 93251
 423452
6
  021209 24330p    021212     423452 632214
  158515
7
 061210 22900p    061213     158515 236663
  634060
8
 061210 22900p    061213     634060 946652
total 1417115 792575       242076  598316  1900183 2836974
william waggott 43399
1 9
  191207 27040p    021209 43399 23730p 102986 201210 – –
 294230
2
  191207 27040p 220672 24910p 549694 291210 220672 24910p 549694 291210 – –
 57490
3 10
  281108 20525p    021209     57490 85833
 389768
4
  281108 20525p    281111     389768 581924
 52137
5 10
  021209 24330p    021209     52137 77841
 353472
6
  021209 24330p    021212     353472 527734
  123144
7
 061210 22900p    061213     123144 183854
  492576
8
 061210 22900p    061213     492576 735416
total 1190496 615720       264071  652680  1468587 2192602
grand total 8604247 3640040       1487004  3679976  9891753 14768390
governance
remuneration report continued wwwtuitravelplccom wwwtuitravelplccom
64 tui travel plc annual report  accounts 2011 tui travel plc annual report  accounts 2011 65
group at a glance strategic overview business and ﬁnancial review shareholder information financial statements governance
governance
value creation synergy plan vcsp 
the value creation synergy plan vcsp was a oneoff threeyear plan and executive directors received an award which was to be satisﬁed by 
a combination of cash and shares provided that stretching performance targets were satisﬁed the performance targets set by the committee 
were based on the achievement of the synergistic objectives of the merger of first choice holidays plc now first choice holidays limited and 
the tourism division of tui ag 
the vcsp is now closed and the ﬁnal release of shares is detailed in the table below 
      vcsp    vcsp    
      shares    shares    
      vested    released    maximum
   vcsp   during    during    vcsp
   shares  market the year market   the year market   shares 
   held at  price per ended price per market actual ended price per market  held at
   1 oct award share at 30 sept share at value at vesting 30 sept share at value at release 30 sept
directors   2010 date award 2011 vesting vesting £ date 2011 release release £ date 2011
dr volker böttcher   78606
1
 281108 20525p 78606 23000p 180794 021210 78606 23000p 180794 021210 –
   72161
2
 021209 24330p 72161 23000p 165970 021210 72161 23000p 165970 021210 –
total   150767       150767  346764  –
paul bowtell   72725
1 3
 281108 20525p    021209 72725 23000p 167268 021210 –
   61351
2 3
 021209 24330p    021209 61351 23000p 141107 021210 –
total   134076       134076  308375  –
peter long   172472
1 3
 281108 20525p    021209 172472 23000p 396686 021210 –
   145499
2 3
 021209 24330p    021209 145499 23000p 334648 021210 –
total   317971       317971  731334  –
johan lundgren   87904
1 3
 281108 20525p    021209 87904 23000p 202179 021210 –
   74947
2 3
 021209 24330p    021209 74947 23000p 172378 021210 –
total   162851       162851  374557  –
william waggott   63239
1 3
 281108 20525p    021209 63239 23000p 145450 021210 –
   53349
2 3
 021209 24330p    021209 53349 23000p 122703 021210 –
total   116588       116588  268153  –
grand total   882253       882253  2029183  –
1  this award is the deferred element of tranche 1 of the vcsp for financial year 200708 a proﬁt margin performance hurdle must be achieved for any of the award to vest the vesting of 
shares is graded according to synergistic value achieved with none of the award vesting for synergistic value below £100m and all of the award vesting for £150m synergistic value or more 
the proﬁt margin hurdle was exceeded and the synergy performance was £195m therefore all of the shares vested
2  this award is the deferred element of tranche 2 of the vcsp for financial year 200809 a proﬁt margin performance hurdle must be achieved for any of the award to vest the vesting of 
shares is graded according to synergistic value achieved with none of the award vesting for synergistic value below £100m and all of the award vesting for £150m synergistic value or more 
the proﬁt margin hurdle was exceeded and the synergy performance was £195m therefore all of the shares vested
3  during financial year 200910 these directors and the company agreed to enter into a joint election pursuant to section 4311 of the income tax earnings and pensions act 2003 in respect 
of this award consequently the remuneration committee agreed to vest this award early and release sufﬁcient shares to satisfy the tax liability arising from the joint election the remaining 
shares were held as restricted shares subject to clawback conditions and were released on the third tranche date in accordance with the scheme rules
directors’ interests in ordinary shares of the company 
as at 30 september 2011 the directors’ interests in ordinary shares of the company were
  ordinary shares   ordinary shares  
  of 10p each as at   of 10p each as at  
directors title 30 september 2011 directors title 30 september 2011
horst baier nonexecutive director – peter long chief executive 3154859
dr volker böttcher managing director central europe 224292 johan lundgren managing director northern region 703762
tony campbell nonexecutive director 46966 coline mcconville nonexecutive director –
clare chapman nonexecutive director 10000 minnow powell nonexecutive director –
bill dalton nonexecutive director 10000 dr erhard schipporeit nonexecutive director –
rainer feuerhake nonexecutive director – dr albert schunk nonexecutive director –
dr michael frenzel nonexecutive chairman – harold sher nonexecutive director –
sir michael hodgkinson nonexecutive deputy chairman 20000 william waggott chief financial ofﬁcer 484124 
 and senior independent director
includes shares purchased under the share incentive plan 
the company’s register of directors’ interests which is open to inspection at the registered ofﬁce contains full details of directors’ 
shareholdings and will be available for inspection before and during the annual general meeting to be held on 7 february 2012 
during the year the price of the company’s ordinary shares ranged between 13720p and 27190p and the midclosing price on 30 september 
2011 was 14930p
on 3 october 2011 tony campbell and william waggott were allocated 1047 and 56 additional shares respectively under the dividend 
reinvestment plan mr powell purchased 6891 shares on the same date
the remuneration report was approved by a duly authorised committee of the board of directors on 4 december 2011 and signed on its behalf by 
bill dalton
chairman of the remuneration committee
4 december 2011
performance share plan psp 
awards made under the psp and which remain outstanding at 30 september 2011 are 
  maximum
  psp   psp    psp     maximum
  shares   shares    shares     value
 maximum awarded   vested    released    maximum based on
 psp during   during    during    psp share
 shares the year  market the year market  planned the year market   shares price of 
 held at ended  price per ended price per market actual ended price per market  held at 1493p at
 1 oct 30 sept award share at 30 sept share at value at vesting 30 sept share at value at release 30 sept 30 sept
directors 2010 2011 date award 2011 vesting vesting £ date 2011 release release £ date 2011 2011 £
dr volker 129209
1
  130907 27300p 64604 24910p 160929 291210 64604 24910p 160929 291210 – –
böttcher 221829
2
  281108 20525p    281111     221829 331191
 203639
3
  021209 24330p    021212     203639 304033 
  202615
4
 061210 22900p    061213     202615 302504 
total 554677 202615       64604  160929  628083 937728 
paul bowtell 202198
1
  130907 27300p 101099 24910p 251838 291210 101099 24910p 251838 291210 – –
 286479
2
  281108 20525p    281111     206901
5
 308903 
 241676
3
  021209 24330p    021212     87271
5
 130296 
total 730353        101099  251838  294172 439199 
peter long 586081
1
  130907 27300p 293040 24910p 729963 291210 293040 24910p 729963 291210 – –
 828258
2
  281108 20525p    281111     828258 1236589 
 698725
3
  021209 24330p    021212     698725 1043196 
  742358
4
 061210 22900p    061213     742358 1108340 
total 2113064 742358       293040  729963  2269341 3388125 
johan lundgren 104773
1
  130907 27300p 52386 24910p 130494 291210 52386 24910p 130494 291210 – –
 192307
1
  191207 27040p 96153 24910p 239517 291210 96153 24910p 239517 291210 – –
 287106
2
  281108 20525p    281111     287106 428649 
 248664
3
  021209 24330p    021212     248664 371255 
  264192
4
 061210 22900p    061213     264192 394439 
total 832850 264192       148539  370011  799962 1194343 
william waggott 146520
1
  130907 27300p 73260 24910p 182491 291210 73260 24910p 182491 291210 – –
 209500
2
  281108 20525p    281111     209500 312784 
 176736
3
  021209 24330p    021212     176736 263867 
  256769
4
 061210 22900p    061213     256769 383356 
total 532756 256769       73260  182491  643005 960007 
grand total 4763700 1465934       680542  1695232  4634563 6919402 
1  this award is based on a performance to 30 september 2010 where the performance measure relates to eps growth in excess of the rate of inﬂation and b performance to the third 
anniversary of the award date where the performance measure relates to the company’s tsr ranking against the constituent companies of the ftse 100 index ranked 30 to 100 by market 
capitalisation as calculated at the award date a performance hurdle of the roic being in excess of the weighted average cost of capital wacc must also be achieved for any of the award to 
be released the number of shares released is graded according to a eps growth with 5 of the award being released for 12 in excess of inﬂation and 50 of the award released for 39  
in excess of inﬂation and b ranking of the company against the comparator group with 75 of the award being released for median and 50 of the award being released for upper quartile 
the roicwacc hurdle was achieved eps growth was greater than 39 in excess of inﬂation and the tsr ranking was below median therefore 50 of the award was released with the 
remainder of the award being forfeit
2  this award is based on a performance to 30 september 2011 where the performance measure relates to eps growth in excess of the rate of inﬂation and b performance to the third 
anniversary of the award date where the performance measure relates to the company’s tsr ranking against the constituent companies of the ftse 100 index ranked 30 to 100 by market 
capitalisation as calculated at the award date a performance hurdle of the roic being in excess of the weighted average cost of capital wacc must also be achieved for any of the award to 
be released the number of shares released is graded according to a eps growth with 5 of the award being released for 12 in excess of inﬂation and 50 of the award released for 39  
in excess of inﬂation and b ranking of the company against the comparator group with 75 of the award being released for median and 50 of the award being released for upper quartile
3  this award is based on a performance to 30 september 2012 where the performance measure relates to eps growth in excess of the rate of inﬂation and b performance to the third 
anniversary of the award date where the performance measure relates to the company’s tsr ranking against the constituent companies of the ftse 100 index ranked 30 to 100 by market 
capitalisation as calculated at the award date a performance hurdle of the roic being in excess of the weighted average cost of capital wacc must also be achieved for any of the award to 
be released the number of shares released is graded according to a eps growth with 5 of the award being released for 12 in excess of inﬂation and 50 of the award released for 39  
in excess of inﬂation and b ranking of the company against the comparator group with 75 of the award being released for median and 50 of the award being released for upper quartile
4  this award is based on a performance to 30 september 2013 where the performance measure relates to eps growth in excess of the rate of inﬂation and b performance to the third 
anniversary of the award date where the performance measure relates to the company’s tsr ranking against the constituent companies of the ftse 100 index ranked 30 to 100 by market 
capitalisation as calculated at the award date a performance hurdle of the roic being in excess of the weighted average cost of capital wacc must also be achieved for any of the award to 
be released the number of shares released is graded according to a eps growth with 5 of the award being released for 12 in excess of inﬂation and 50 of the award released for 39  
in excess of inﬂation and b ranking of the company against the comparator group with 75 of the award being released for median and 50 of the award being released for upper quartile
5  paul bowtell ceased employment with effect from 31 december 2010 under the terms of his departure and in accordance with the scheme rules these awards were subject to prorating  
on the basis of the time elapsed from award date to cessation of employment as compared with 36 months with the remainder of the award being forfeit
governance
remuneration report continued wwwtuitravelplccom
tui travel plc annual report  accounts 2011 67
group at a glance strategic overview business and ﬁnancial review governance financial statements shareholder information
financial statements
wwwtuitravelplccom
66 tui travel plc annual report  accounts 2011
opinion on other matters prescribed by the 
companies act 2006 
in our opinion
• the information given in the directors’ report for the ﬁnancial year 
for which the group ﬁnancial statements are prepared is consistent 
with the group ﬁnancial statements and
• the information given in the corporate governance report set  
out on pages 51 to 55 with respect to internal control and risk 
management systems and about share capital structures is 
consistent with the ﬁnancial statements
matters on which we are required to report  
by exception 
we have nothing to report in respect of the following 
under the companies act 2006 we are required to report to you if  
in our opinion 
• certain disclosures of directors’ remuneration speciﬁed by law  
are not made or 
• we have not received all the information and explanations we 
require for our audit or
• a corporate governance statement has not been prepared by the 
parent company
under the listing rules we are required to review 
• the directors’ statement set out on page 49 in relation to going 
concern 
• the part of the corporate governance statement relating  
to the company’s compliance with the nine provisions of the  
uk corporate governance code speciﬁed for our review and
• certain elements of the report to shareholders by the board  
on directors’ remuneration
other matter 
we have reported separately on the parent company ﬁnancial 
statements of tui travel plc for the year ended 30 september 2011 
and on the information in the remuneration report that is described 
as having been audited 
roger de peyrecave senior statutory auditor
for and on behalf of pricewaterhousecoopers llp 
chartered accountants and statutory auditors
london
4 december 2011
we have audited the group ﬁnancial statements of tui travel plc for 
the year ended 30 september 2011 which comprise the consolidated 
income statement the consolidated statement of comprehensive 
income the consolidated balance sheet the consolidated statement 
of changes in equity the consolidated statement of cash ﬂows and 
the related notes the ﬁnancial reporting framework that has been 
applied in their preparation is applicable law and international financial 
reporting standards ifrs as adopted by the european union 
respective responsibilities of directors and auditors 
as explained more fully in the directors’ responsibilities statement  
set out on page 50 the directors are responsible for the preparation 
of the group ﬁnancial statements and for being satisﬁed that they 
give a true and fair view our responsibility is to audit and express  
an opinion on the group ﬁnancial statements in accordance with 
applicable law and international standards on auditing uk and 
ireland those standards require us to comply with the auditing 
practices board’s ethical standards for auditors 
this report including the opinions has been prepared for and only  
for the company’s members as a body in accordance with chapter 3 
of part 16 of the companies act 2006 and for no other purpose  
we do not in giving these opinions accept or assume responsibility 
for any other purpose or to any other person to whom this report is 
shown or into whose hands it may come save where expressly agreed 
by our prior consent in writing
scope of the audit of the ﬁnancial statements 
an audit involves obtaining evidence about the amounts and 
disclosures in the ﬁnancial statements sufﬁcient to give reasonable 
assurance that the ﬁnancial statements are free from material 
misstatement whether caused by fraud or error this includes an 
assessment of whether the accounting policies are appropriate to  
the group’s circumstances and have been consistently applied and 
adequately disclosed the reasonableness of signiﬁcant accounting 
estimates made by the directors and the overall presentation of  
the ﬁnancial statements in addition we read all the ﬁnancial and 
nonﬁnancial information in the annual report  accounts to identify 
material inconsistencies with the audited ﬁnancial statements  
if we become aware of any apparent material misstatements  
or inconsistencies we consider the implications for our report
opinion on ﬁnancial statements 
in our opinion the group ﬁnancial statements 
• give a true and fair view of the state of the group’s affairs as at  
30 september 2011 and of its proﬁt and cash ﬂows for the year 
then ended 
• have been properly prepared in accordance with ifrs as adopted 
by the european union and 
• have been prepared in accordance with the requirements of the 
companies act 2006 and article 4 of the las regulation 
        restated
       year ended year ended 
       30 september 30 september 
       2011 2010 
      note £m £m
revenue      1 3 14687 13514
cost of sales       13351 12343
gross proﬁt       1336 1171
administrative expenses       1094 1124
share of proﬁtslosses of joint ventures and associates     12 13 3
operating proﬁt       255 44
analysed as
underlying operating proﬁt      1 3 471 399
separately disclosed items      4 74 255
predecessor accounting for magic life      1 17 19
acquisition related expenses      13a 82 63
impairment of goodwill      10 39 12
taxation on proﬁts and interest of joint ventures and associates    12 4 6
total operating proﬁt       255 44
financial income      5 83 69
financial expenses      5 194 186
net ﬁnancial expenses       111 117
proﬁtloss before tax       144 73
taxation charge      8 57 50
proﬁtloss for the year       87 123
attributable to
equity holders of the parent       85 123
noncontrolling interests       2 –
proﬁtloss for the year       87 123
        restated
       year ended year ended
       30 september 30 september
       2011 2010
       pence pence
basic and diluted earningsloss per share for proﬁtloss attributable  
to the equity holders of the company during the year
basic earningsloss per share      32 77 111
diluted earningsloss per share      32 76 111
financial statements
consolidated income statement
for the year ended 30 september 2011
financial statements
independent auditors’ report to the members of tui travel plc wwwtuitravelplccom wwwtuitravelplccom
68 tui travel plc annual report  accounts 2011 tui travel plc annual report  accounts 2011 69
group at a glance strategic overview business and ﬁnancial review governance financial statements shareholder information
financial statements
consolidated balance sheet
at 30 september 2011
       restated restated
      30 september  30 september 30 september
      2011 2010 2009
     note £m £m £m
noncurrent assets
intangible assets     10 4642 4659 4737
property plant and equipment     11 1001 1023 975
investments in joint ventures and associates     12 242 211 112
other investments     12 72 79 77
trade and other receivables     16 202 156 194
retirement beneﬁt asset     6c 1 1 1
derivative ﬁnancial instruments     25i 30 21 13
deferred tax assets     14 138 114 211
      6328 6264 6320
current assets
inventories     15 69 54 56
other investments     17b 22 5 40
trade and other receivables     16 1472 1425 1507
income tax recoverable      62 34 30
derivative ﬁnancial instruments     25i 185 144 271
cash and cash equivalents     17a 902 1304 790
assets classiﬁed as held for sale     18 13 57 126
      2725 3023 2820
total assets      9053 9287 9140
current liabilities
interestbearing loans and borrowings     19 96 757 327
retirement beneﬁts     6c 3 5 3
derivative ﬁnancial instruments     25i 133 122 284
trade and other payables     20 4622 4335 4282
provisions for liabilities     21 317 241 194
income tax payable      133 84 68
liabilities classiﬁed as held for sale     18 – 31 59
      5304 5575 5217
noncurrent liabilities
interestbearing loans and borrowings     19 802 796 801
retirement beneﬁts     6c 511 489 498
derivative ﬁnancial instruments     25i 18 23 18
trade and other payables     22 56 93 108
provisions for liabilities     21 353 307 250
deferred tax liabilities     14 71 28 97
      1811 1736 1772
total liabilities      7115 7311 6989
net assets      1938 1976 2151
equity
called up share capital     23 112 112 112
convertible bond reserve     24 85 83 –
other reserves     24 2846 2794 2752
accumulated losses     24 1155 1014 716
total equity attributable to equity holders of the parent    24 1888 1975 2148
noncontrolling interests     24 50 1 3
total equity     24 1938 1976 2151
the ﬁnancial statements on pages 67 to 136 were approved by a duly authorised committee of the board of directors on 4 december 2011 and 
signed on its behalf by
peter j long william h waggott
chief executive chief financial ofﬁcer
company number 6072876
financial statements
consolidated statement of comprehensive income
for the year ended 30 september 2011
        restated
       year ended year ended
       30 september  30 september
       2011 2010
      note £m £m
proﬁtloss for the year       87 123
other comprehensive expenseincome
foreign exchange translation       18 85
actuarial losses arising in respect of deﬁned beneﬁt pension schemes    6c 89 42
cash ﬂow hedges
– movement in fair value      25j 85 33
– amounts recycled to the consolidated income statement     25j 4 41
foreign exchange gains recycled through the consolidated income statement     – 6
share of other movements in reserves of associates and joint ventures     – 2
available for sale ﬁnancial assets
– movement in fair value       2 4
– amounts recycled to the consolidated income statement      1 –
deferred tax on items in other comprehensive income     8iii 29 9
other comprehensive incomeexpense for the year net of tax     56 70
total comprehensive incomeexpense for the year      31 193
attributable to
equity holders of the parent       26 193
noncontrolling interests       5 –
total       31 193
nongaap measures
reconciliation of underlying operating proﬁt to underlying proﬁt before tax
        restated
       year ended year ended
       30 september  30 september
       2011 2010
      note £m £m
underlying operating proﬁt      3 471 399
net underlying ﬁnancial expenses      5 111 110
underlying proﬁt before tax       360 289 wwwtuitravelplccom wwwtuitravelplccom
70 tui travel plc annual report  accounts 2011 tui travel plc annual report  accounts 2011 71
group at a glance strategic overview business and ﬁnancial review governance financial statements shareholder information
        restated
       year ended year ended
       30 september 30 september
       2011 2010
      note £m £m
proﬁtloss for the year       87 123
adjustment for
depreciation and amortisation      10 11 238 265
impairment of intangible assets and property plant and equipment    10 11 30 15
impairment of goodwill      10 39 12
equitysettled sharebased payment expenses      6d 19 14
loss on sale of property plant and equipment      7 6 1
share of proﬁtloss of joint ventures and associates     12 13 3
loss on foreign exchange      7 38 18
change in value of trade investment      12 – 30
dividends received from joint ventures and associates     12 7 9
pension curtailment gain recognised in consolidated income statement    6c 64 –
financial income      5 83 69
financial expenses      5 194 186
loss from discontinued operation       – 18
taxation      8 57 50
operating proﬁt before changes in working capital and provisions     555 369
increasedecrease in inventories       9 1
increasedecrease in trade and other receivables      68 81
increase in trade and other payables       140 69
increase in provisions and employee beneﬁts       125 91
cash ﬂows from operations       743 611
interest paid       86 59
interest received       9 2
income taxes paid       53 34
cash ﬂows from operating activities       613 520
investing activities
proceeds from sale of property plant and equipment      148 26
proceeds from disposal of associated undertakings net of cash disposed of     – 1
acquisition of subsidiaries net of cash acquired      13b 33 51
proceeds from other investments       3 9
investment in joint ventures associates and other investments      18 90
acquisition of property plant and equipment      11 257 164
acquisition of intangible assets      10 56 44
cash ﬂows from investing activities       213 313
financing activities
proceeds from new loans and deposits taken       26 769
repayment of borrowings       556 257
repayment of ﬁnance lease liabilities       145 31
dividends paid to ordinary and noncontrolling interests     24 124 120
shares purchased by employee beneﬁt trust      23 7 7
cash ﬂows from ﬁnancing activities       806 354
net decreaseincrease in cash and cash equivalents      406 561
cash and cash equivalents at start of the year      17 1304 790
effect of foreign exchange on cash held       4 47
cash and cash equivalents at end of the year      17 902 1304
movements in cash and net debt are presented in note 26
financial statements
consolidated statement of cash ﬂows
for the year ended 30 september 2011
   other reserves
  
  called up  convertible     equity non
  share bond merger translation hedging accumulated holders controlling
  capital reserve reserve reserve reserve losses of parent interests total
  £m £m £m £m £m £m £m  £m £m
balance at 1 october 2009  
as previously reported  112 – 2490 360 75 716 2171 3 2174
adjustment in respect of magic life note 1bii – – 11 12 – – 23 – 23
balance at 1 october 2009 restated  112 – 2479 348 75 716 2148 3 2151
loss for the year restated  – – – – – 123 123 – 123
other comprehensive expenseincome  
for the year as previously reported  – – – 59 56 70 73 – 73
adjustment in respect of magic life  – – – 3 – – 3 – 3
other comprehensive expenseincome  
for the year restated  – – – 56 56 70 70 – 70
total comprehensive expenseincome  
for the year restated  – – – 56 56 193 193 – 193
transactions with owners
sharebased payment  – – – – – 20 20 – 20
acquisition of shares by employee beneﬁt trust – – – – – 7 7 – 7
dividends  – – – – – 118 118 2 120
issue of convertible bond net of deferred tax – 83 – – – – 83 – 83
capital increase in magic life  – – 42 – – – 42 – 42
at 30 september 2010 restated  112 83 2521 292 19 1014 1975 1 1976
   other reserves
  
  called up  convertible     equity non
  share bond merger translation hedging accumulated holders controlling
  capital reserve reserve reserve reserve losses of parent interests total
  £m £m £m £m £m £m £m  £m £m
at 1 october 2010 restated  112 83 2521 292 19 1014 1975 1 1976
proﬁt for the year  – – – – – 85 85 2 87
other comprehensive expenseincome for the year – – – 3 56 112 59 3 56
total comprehensive expenseincome for the year – – – 3 56 27 26 5 31
transactions with owners
sharebased payment  – – – – – 19 19 – 19
acquisition of shares by employee beneﬁt trust – – – – – 7 7 – 7
dividends  – – – – – 122 122 2 124
capital increase in magic life  – – 2 – – – 2 – 2
disposals to noncontrolling interests  – – – 3 – 4 7 46 39
change in deferred tax rate on equity 
portion of convertible bond  – 2 – – – – 2 – 2
at 30 september 2011  112 85 2523 286 37 1155 1888 50 1938
details of reserve movements are set out in note 24 to the consolidated ﬁnancial statements
restatement
please refer to note 1bii for a full explanation of the restatement
financial statements
consolidated statement of changes in equity financial statements
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tui travel plc annual report  accounts 2011 73
group at a glance strategic overview business and ﬁnancial review governance financial statements shareholder information
financial statements
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72 tui travel plc annual report  accounts 2011
the representation of jet4you and the restatement of magic life has resulted in the restatement of the comparative year’s results as follows
consolidated income statement
     year ended
     30 september  impact of restated
     2010 impact of the predecessor year ended
     as previously representation accounting for 30 september
     reported of jet4you magic life 2010
     £m £m £m £m
revenue     13400 91 23 13514
cost of sales     12217 92 34 12343
gross proﬁtloss     1183 1 11 1171
administrative expenses     1099 17 8 1124
share of lossesproﬁt of joint ventures and associates    3 – – 3
operating proﬁtloss     81 18 19 44
analysed as
underlying operating proﬁtloss     412 13 – 399
separately disclosed items     250 5 – 255
predecessor accounting for magic life     – – 19 19
acquisition related expenses     63 – – 63
impairment of goodwill     12 – – 12
taxation on results of joint ventures and associates    6 – – 6
     81 18 19 44
there was no impact on taxation ﬁnancial income or ﬁnancial expenses following the representation and the restatement the loss for the year 
ended 30 september 2010 is restated as follows
        year ended
        30 september
        2010
        £m
loss for the year from continuing operations as previously stated      86
representation of jet4you’s discontinued operations as continuing operations     18
restatement in respect of predecessor accounting for magic life      19
loss for the year as restated        123
loss for the year to equity holders of the parent       123
earnings per share
    earnings per share –  
    continuing operations
    
year ended 30 september 2010       basic pence diluted pence
originally reported       78 78
representation of jet4you       16 16
restatement in respect of predecessor accounting for magic life     17 17
restated       111 111
ii restatement
jet4you
the results of the group’s business of société d’investissement 
aérien sa jet4you were previously separately classiﬁed as a 
discontinued operation for the comparative year ended 30 september 
2010 as a result of the cessation of negotiations for the sale of this 
business in the ﬁrst half of the ﬁnancial year this business ceases to 
qualify as held for sale
in accordance with ifrs 5 the results of jet4you are presented in  
the consolidated income statement as continuing in both the current 
and comparative year for the purposes of segmental reporting the 
results of jet4you are included within the rest of western europe 
segment the balance sheets for both comparative years have not 
been represented or remeasured as dictated by ifrs 5 accordingly 
the comparative consolidated statement of cash ﬂows has not been 
represented
the current year’s balance sheet values have been remeasured to  
the carrying amounts prior to the disposal group being classiﬁed as 
held for sale adjusted for an additional £1m depreciation that would 
have been recognised if the disposal group had not been classiﬁed as 
held for sale
magic life
on 26 may 2011 the group announced that it had reached agreement 
with tui ag and its subsidiary undertaking magic life gmbh  co 
kg for the group to acquire six separate operating companies the 
‘ml companies’ referred to as ‘magic life’ through which magic life 
gmbh  co kg leases and manages 13 holiday clubs in turkey 
tunisia egypt greece and spain
the acquisition is classiﬁed under the uk listing rules as a  
‘related party transaction’ as tui ag is classiﬁed as a ‘related party’  
as a substantial shareholder of tui travel plc consequently the 
acquisition meets the conditions of a business combination between 
entities under common control as deﬁned by ifrs 3 revised the 
group’s accounting policy for business combinations under common 
control is to incorporate the results of magic life as if both the group 
and magic life had always been combined known as ‘predecessor 
accounting’ control passed from tui ag to the group on 22 june 
2011 following approval at the company’s general meeting on that 
date the results of magic life have therefore been fully included in 
the consolidated income statement for both years including the 
precontrol periods the results of magic life for the precontrol 
period have been separately disclosed on the predecessor accounting 
line on the face of the consolidated income statement whereas the 
results in the postcontrol period are included in underlying proﬁt for 
the year the inclusion of magic life’s results under predecessor 
accounting has no impact on the group’s cash or distributable 
reserves for the precontrol periods
1 accounting policies
the accounting policies adopted in the preparation of these 
consolidated ﬁnancial statements are consistent with those followed 
in the preparation of the group’s consolidated ﬁnancial statements 
for the year ended 30 september 2010 except for the adoption of the 
following new international financial reporting standards ifrs and 
interpretations that are applicable for the year ended 30 september 
2011 these new or amended standards have no signiﬁcant impact  
on consolidated results or ﬁnancial position
ifric 15 – agreements for the construction of real estate
ifric 17 – distributions of noncash assets to owners
ifric 18 – transfer of assets from customers
ifric 19 – extinguishing ﬁnancial liabilities with equity instruments
amendment to ifrs 1 firsttime adoption of ifrs – additional 
exemptions for ﬁrsttime adopters
amendment to ifrs 2 sharebased payment – group cash settled 
sharebased payment transaction
amendment to ias 32 financial instruments – presentation 
classiﬁcation of rights issues
annual improvements project 2009 partly applicable for the year 
ended 30 september 2010
annual improvements project 2010 partly applicable for the year 
ended 30 september 2011
the consolidated ﬁnancial statements are presented in the group’s 
presentational currency of sterling rounded to the nearest million
a statement of compliance
the consolidated ﬁnancial statements for the year ended 30 september 
2011 have been prepared and approved by the directors in 
accordance with international financial reporting standards and 
ifric interpretations as adopted by the european union adopted 
ifrs and the companies act 2006 applicable to companies reporting 
under ifrs the consolidated ﬁnancial statements were approved on 
4 december 2011
b basis of preparation
the consolidated ﬁnancial statements are prepared on the historical 
cost basis other than derivative ﬁnancial instruments ﬁnancial 
instruments held for trading and ﬁnancial instruments classiﬁed as 
available for sale which are stated at their fair value noncurrent 
assets and disposal groups held for sale are stated at the lower of 
their carrying amount and fair value less costs to sell
i parent company
tui travel plc the company is a company incorporated and 
domiciled in england and wales under the companies act 1985  
and listed on the london stock exchange the registered ofﬁce  
of the company is tui travel house crawley business quarter 
fleming way crawley west sussex rh10 9ql
the company has elected to prepare its parent company ﬁnancial 
statements in accordance with uk gaap
financial statements financial statements
notes to the consolidated ﬁnancial statements financial statements
wwwtuitravelplccom wwwtuitravelplccom
74 tui travel plc annual report  accounts 2011 tui travel plc annual report  accounts 2011 75
group at a glance strategic overview business and ﬁnancial review governance financial statements shareholder information
financial statements
notes to the consolidated ﬁnancial statements continued
on purchase or sale of a noncontrolling interest held in a group 
subsidiary the group recognises increases or decreases in the value 
of its interest directly in equity providing there is no overall change in 
control as such these transactions do not result in goodwill or gains 
and losses being recognised in the consolidated income statement 
when control is lost any remaining interest in equity is remeasured  
to fair value and a gain or loss is recognised in the consolidated 
income statement
iv transactions eliminated on consolidation
intragroup balances and any unrealised gains or income and 
expenses arising from intragroup transactions are eliminated in 
preparing the consolidated ﬁnancial statements unrealised gains 
arising from transactions with associates and jointly controlled  
entities are eliminated to the extent of the group’s interest in the 
entity unrealised losses are eliminated in the same way as unrealised 
gains but only to the extent that there is no evidence of impairment
v acquisition in stages
where a group gains control of a subsidiary undertaking through  
a step acquisition the existing interest owned is remeasured at fair 
value with the difference between fair value and book value being 
recognised in the income statement the accounting impact of 
changes in share ownership which do not affect control is accounted 
for through reserves
vi acquisition related expenses
acquisition related expenses comprise amortisation of business 
combination intangibles other acquisition related expenses and 
remuneration for postcombination services directly attributable 
acquisition costs are expensed in the consolidated income statement 
rather than included as part of the purchase price
vii contingent consideration
contingent consideration for business combinations up until  
30 september 2009
contingent consideration is recognised when the payment amount 
becomes probable and the amounts can be reliably measured  
the purchase price is subsequently adjusted against goodwill or 
negative goodwill as the estimate of the amount payable is revised
contingent consideration for business combinations from  
1 october 2009
contingent consideration is accounted for at fair value at the 
acquisition date with subsequent changes in the fair value being 
recognised in the income statement contingent consideration 
dependent upon continuing service of an employee is charged  
to the income statement over the related service period
the term contingent consideration has been used throughout these 
ﬁnancial statements to describe the part of the overall consideration 
paid to the former shareholders of businesses acquired on or after  
1 october 2009 that is contingent upon the future results of those 
acquired businesses including where the payment is contingent on 
those former shareholders undertaking employment with the group 
for a predetermined period after the relevant business combination 
ifrs 3 revised requires that these amounts are charged to the 
consolidated income statement as a postacquisition employment 
cost over the term of the relevant post combination employment 
period the group includes the relevant income statement charge 
within acquisition related expenses note 13 and which are included 
within operating proﬁt the directors believe the commercial  
nature of these payments means that this term remains the most 
appropriate to describe these payments notwithstanding the 
accounting treatment required by ifrs 3 revised
and gearing as well as being the main basis for the group’s credit 
facility covenants are currently well within the covenant limits 
forecasts reviewed by the board including forecasts adjusted for 
signiﬁcantly worse economic conditions show continued compliance 
with these covenants for both covenants earnings are calculated on 
an underlying basis as described in note 1biii
on the basis of its forecasts both base case and adjusted as described 
above and available facilities the board has concluded that the going 
concern basis of preparation continues to be appropriate
c basis of consolidation
the group ﬁnancial statements consolidate those of the company 
and its subsidiaries together referred to as the group and equity 
account the group’s interest in joint ventures and associates the 
parent company ﬁnancial statements present information about the 
company as a separate entity and not about the group accounting 
policies of subsidiaries joint ventures and associates are amended 
where necessary to be consistent with those adopted by the group 
where audited ﬁnancial statements are not coterminous with those 
of the group the ﬁnancial information is derived from the last audited 
accounts available and unaudited management accounts for the 
period up to the group’s balance sheet date
i subsidiaries
subsidiaries are entities controlled by the group control exists when 
the group has the power directly or indirectly to govern the ﬁnancial 
and operating policies of an entity so as to obtain beneﬁts from its 
activities in assessing control potential voting rights that are currently 
exercisable or convertible are taken into account the ﬁnancial 
statements of subsidiaries are included in the consolidated ﬁnancial 
information from the date that control commences until the date  
that control ceases
ii joint ventures and associates
joint ventures are jointly controlled entities whose activities the 
group has the power to control jointly established by contractual 
agreement associates are those entities in which the group has  
the ability to exercise signiﬁcant inﬂuence but not control over the 
ﬁnancial and operating policies the consolidated ﬁnancial statements 
include the group’s share of the total recognised income and expense 
and changes in equity of joint ventures and associates on an equity 
accounted basis from the date that joint control or signiﬁcant 
inﬂuence respectively commences until the date that it ceases 
associates and joint ventures are recorded at cost as adjusted for 
postacquisition changes in the group’s share of net assets of the 
entity including goodwill net of accumulated impairment loss when 
the group’s share of losses exceeds the carrying amount of the joint 
venture or associate the carrying amount is reduced to £nil and 
recognition of further losses is discontinued except to the extent  
that the group has incurred legal or constructive obligations or  
made payments on behalf of the joint venture or associate
iii noncontrolling interests
in the consolidated balance sheet the share of net assets attributable 
to noncontrolling interests is disclosed as a separate component  
of equity after share capital and reserves although it is neither a 
ﬁnancial liability nor an equity instrument the consolidated income 
statement discloses the amount of the result for the year attributable 
to noncontrolling interests
where the group has a written put option in respect of a noncontrolling 
interest and has an unavoidable obligation to purchase the shareholding 
the obligation is recorded as a ﬁnancial liability at fair value rather 
than being reported as a separate component of equity no result is 
attributable to noncontrolling interests and instead changes to the 
fair value of the ﬁnancial liability are recorded at each period end in 
the income statement within ﬁnancial income or ﬁnancial expenses
1 accounting policies continued
consolidated balance sheet
   30 september impact of  30 september impact of
   2009 predecessor restated 2010 predecessor restated
   as previously accounting for 30 september as previously accounting for 30 september
   reported magic life 2009 reported magic life 2010
   £m £m £m £m £m £m
property plant and equipment   964 11 975 1012 11 1023
other noncurrent assets   5345 – 5345 5241 – 5241
total noncurrent assets   6309 11 6320 6253 11 6264
inventories   51 5 56 49 5 54
current investments   36 4 40 – 5 5
trade and other receivables   1482 25 1507 1404 21 1425
other current assets   427 – 427 235 – 235
cash and cash equivalents   790 – 790 1304 – 1304
total current assets   2786 34 2820 2992 31 3023
interestbearing liabilities   327 – 327 757 – 757
current trade and other payables   4220 62 4282 4301 34 4335
current provisions   189 5 194 236 5 241
current income tax payable   67 1 68 84 – 84
other current liabilities   346 – 346 158 – 158
total current liabilities   5149 68 5217 5536 39 5575
noncurrent liabilities   1772 – 1772 1736 – 1736
net assets   2174 23 2151 1973 3 1976
total equity   2174 23 2151 1973 3 1976
iii underlying measures of proﬁts and losses
the group believes that underlying operating proﬁt underlying proﬁt 
before tax and underlying earnings per share provide additional 
guidance to statutory measures to help understand the underlying 
performance of the business during the ﬁnancial year the term 
underlying is not deﬁned under ifrs it is a measure that is used by 
management to assess the underlying performance of the business 
internally and is not intended to be a substitute measure for adopted 
ifrss’ gaap measures the group deﬁnes these underlying measures 
as follows
underlying operating proﬁt is operating proﬁt or loss from continuing 
operations stated before separately disclosed items note 4 the 
impact of predecessor accounting acquisition related expenses 
impairment of goodwill interest and taxation on the group’s share  
of the results of joint ventures and associates
underlying proﬁt before tax is proﬁt or loss from continuing 
operations before taxation group and share of joint ventures and 
associates the impact of predecessor accounting acquisition related 
items impairment of goodwill the interest expense of joint ventures 
and associates and separately disclosed items included within both 
the operating result note 4 and net ﬁnancial expenses note 5
underlying earnings used in the calculation of underlying earnings  
per share is proﬁt after tax from continuing operations excluding  
the impact of predecessor accounting acquisition related items 
impairment of goodwill and separately disclosed items included within 
both the operating result note 4 and net ﬁnancial expenses note 
5 for the purpose of this calculation an underlying tax charge is 
used which excludes the tax effects of separately disclosed items 
acquisition related expenses goodwill impairment charges and 
separately disclosable tax items
it should be noted that the deﬁnitions of underlying items being used 
in these consolidated ﬁnancial statements are those used by the group 
and may not be comparable with the term ‘underlying’ as deﬁned by 
other companies within both the same sector or elsewhere
iv separately disclosed items
separately disclosed items are those signiﬁcant items which in 
management’s judgment are highlighted by virtue of their size or 
incidence to enable a full understanding of the group’s ﬁnancial 
performance such items are included within the income statement 
caption to which they relate notes 4 and 5
v business and performance review
the group’s business activities together with factors likely to affect 
its future development performance and position are set out in  
the business performance section in addition note 25 sets out the 
group’s objectives policies and processes for managing its capital 
ﬁnancial risks ﬁnancial instruments and hedging activities as well  
as its exposures to credit and liquidity risk
vi funding and liquidity
the board remains satisﬁed with the group’s funding and liquidity 
position the main sources of debt funding are
1 a new shareholder loan from tui ag put in place following the 
magic life transaction described in note 1bii this amounts  
to €30m and is being repaid as follows 30 april 2012 €20m and  
31 august 2012 €10m
2 a total of £970m syndicated bank revolving credit facilities which 
mature in june 2015
3 £185m of bonding and letter of credit facilities which mature in 
june 2015
4 a £350m convertible bond due october 2014 issued in october 
2009 and
5 a £400m convertible bond due april 2017 issued in april 2010
the ratio of earnings before interest taxation depreciation 
amortisation and operating lease rentals ebitdar to ﬁxed  
charges being the aggregate amount of interest and any other 
ﬁnance charges in respect of borrowings and including all payments 
under operating leases and the ratio of net debt to earnings before 
interest taxation depreciation and amortisation ebitda which  
the board believes to be the most useful measures of cash generation  financial statements
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76 tui travel plc annual report  accounts 2011 tui travel plc annual report  accounts 2011 77
group at a glance strategic overview business and ﬁnancial review governance financial statements shareholder information
financial statements
notes to the consolidated ﬁnancial statements continued
derivatives
derivatives are accounted for in accordance with the policy in note 
1eiii
derecognition
the group derecognises a ﬁnancial liability when the contractual 
obligations to pay the contractual cash ﬂows on the ﬁnancial liability 
are discharged cancelled or expire
iii derivative ﬁnancial instruments
the group uses derivative ﬁnancial instruments to hedge its exposure 
to foreign exchange interest rate and fuel price risks arising from 
operational ﬁnancing and investment activities in accordance with its 
treasury policy the group does not hold or issue derivative ﬁnancial 
instruments for trading purposes however derivatives that do not 
qualify for hedge accounting are accounted for as trading instruments
derivative ﬁnancial instruments are initially recognised at fair value  
on the date a derivative contract is entered into and are subsequently 
remeasured at fair value the method of recognising the resulting gain 
or loss depends on whether the derivative is designated as a hedging 
instrument and if so the nature of the item being hedged the gain or 
loss on remeasurement to fair value on derivatives not designated as 
a hedging instrument is recognised immediately in the income statement 
where derivatives qualify for hedge accounting see note 1f
iv share capital
ordinary shares are classiﬁed as equity incremental costs directly 
attributable to the issue of ordinary shares and share awards are 
recognised as a deduction from equity net of any tax effects
f hedge accounting
the group designates certain derivatives as either hedges of a 
particular risk associated with a recognised asset or liability or a  
highly probable forecast transaction cash ﬂow hedge or a hedge of 
the fair value of recognised assets or liabilities or a ﬁrm commitment 
fair value hedge
on initial designation of the hedge the group formally documents the 
relationship between the hedging instruments and hedged items 
including the risk management objectives and strategy in undertaking 
the hedge transaction together with the methods that will be used  
to assess the effectiveness of the hedging relationship the group 
makes an assessment both at the inception of the hedge relationship 
as well as on an ongoing basis whether the hedging instruments are 
expected to be ’highly effective’ in offsetting the changes in the fair 
value or cash ﬂows of the respective hedged items during the period 
for which the hedge is designated and whether the actual results of 
each hedge are within a range of 80125 for a cash ﬂow hedge of  
a forecast transaction the transaction should be highly probable to 
occur and should present an exposure to variations in cash ﬂows that 
could ultimately affect reported net income
derivatives are recognised initially at fair value attributable 
transaction costs are recognised in proﬁt or loss as incurred 
subsequent to initial recognition derivatives are measured at fair 
value and changes therein are accounted for as described below
i cash ﬂow hedges
where a derivative ﬁnancial instrument is designated as a hedge of 
the variability in cash ﬂows arising from a recognised asset or liability 
or a highly probable forecast transaction the effective part of any fair 
value gain or loss on the derivative ﬁnancial instrument is recognised 
directly in the hedging reserve any ineffective portion of the hedge  
is recognised immediately within the consolidated income statement
cash and cash equivalents
cash and cash equivalents comprise cash balances and call deposits 
which are readily convertible to known amounts of cash and which are 
subject to insigniﬁcant risk of changes in value and have an original 
maturity of three months or less bank overdrafts that are repayable 
on demand and form an integral part of the group’s cash management 
are included as a component of cash and cash equivalents for the 
purpose only of the consolidated statement of cash ﬂows
derivatives
derivatives are accounted for in accordance with the policy in  
note 1eiii
derecognition
the group derecognises a ﬁnancial asset when the contractual  
rights to the cash ﬂows from the asset expire or it transfers the  
rights to receive the contractual cash ﬂows on the ﬁnancial asset  
in a transaction in which substantially all the risks and rewards of 
ownership of the ﬁnancial asset are transferred any interest in 
transferred ﬁnancial assets that is created or retained by the group  
is recognised as a separate asset or liability
ii financial liabilities
financial liabilities are either classiﬁed as ﬁnancial liabilities measured 
at amortised cost or ﬁnancial liabilities at fair value through proﬁt or 
loss financial liabilities include trade and other payables excluding 
tax and social security and deferred income accruals ﬁnance debt 
and derivative ﬁnancial instruments the group determines the 
classiﬁcation of its ﬁnancial liabilities at initial recognition financial 
liabilities are recognised initially at fair value normally being the 
transaction price plus in the case of ﬁnancial liabilities not at fair  
value through proﬁt or loss directly attributable transaction costs 
the subsequent measurement of ﬁnancial liabilities depends on  
their classiﬁcation as follows
financial liabilities measured at amortised cost
all ﬁnancial liabilities are initially recognised at fair value for 
interestbearing loans and borrowings this is the fair value of the 
proceeds received net of issue costs associated with the borrowing 
after initial recognition ﬁnancial liabilities other than those at fair 
value through proﬁt or loss are subsequently measured at amortised 
cost using the effective interest method amortised cost is calculated 
by taking into account any issue costs and any discount or premium 
on settlement gains and losses arising on the repurchase settlement 
or cancellation of liabilities are recognised respectively in interest and 
other revenues and ﬁnance costs this category of ﬁnancial liabilities 
includes trade and other payables
convertible bonds
convertible bonds are separated into three components liability 
issuer call option and equity at inception each component is 
recognised separately
the initial fair value of the liability component of the convertible  
bond is determined using the market interest rate for an equivalent 
nonconvertible bond and is subsequently recorded at an amortised 
cost basis using the effective interest method until extinguished on 
conversion or maturity of the bonds the issuer call option is fair 
valued using a valuation model and is measured at each balance sheet 
date with changes in fair value recognised in the income statement 
the remainder of the proceeds are recognised in shareholders’ equity 
in retained earnings
issue costs are apportioned between the liability and equity components 
of a convertible bond based on the allocation of proceeds to the liability 
and equity components when the instruments are ﬁrst recognised
ii foreign operations
the assets and liabilities of foreign operations including goodwill  
and fair value adjustments arising on consolidation are translated to 
sterling at the foreign exchange rates ruling at the balance sheet date
the revenues and expenses of overseas operations are translated  
at rates approximating to the foreign exchange rates ruling at the 
dates of the transactions foreign exchange differences arising on 
retranslation have been recognised directly in equity in the translation 
reserve a designated foreign exchange reserve since 1 january 2007
foreign exchange gains and losses arising from a monetary item 
receivable from or payable to a foreign operation the settlement  
of which is neither planned nor likely in the foreseeable future are 
considered to form part of a net investment in a foreign operation 
and are recognised directly in equity in the translation reserve
iii net investment in foreign operations
foreign currency differences arising on the retranslation of a  
ﬁnancial liability designated as a hedge of a net investment in a 
foreign operation are recognised in the consolidated statement of 
comprehensive income to the extent that the hedge is effective and 
are presented within equity in the translation reserve to the extent 
that the hedge is ineffective such differences are recognised in proﬁt 
or loss when the hedged part of a net investment is disposed of the 
relevant amount in the translation reserve is transferred to proﬁt or 
loss as part of the proﬁt or loss on disposal
e financial instruments
i financial assets
financial assets are either classiﬁed as loans and receivables available 
for sale ﬁnancial assets or ﬁnancial assets at fair value through proﬁt 
or loss financial assets include cash and cash equivalents trade 
receivables loans trade and other investments derivative ﬁnancial 
instruments and other receivables but excludes ﬁnancial deposits 
prepayments and taxes the group determines the classiﬁcation of  
its ﬁnancial assets at initial recognition financial assets are recognised 
initially at fair value normally being the transaction price plus in the 
case of ﬁnancial assets not at fair value through proﬁt or loss directly 
attributable transaction costs the subsequent measurement of 
ﬁnancial assets depends on their classiﬁcation as follows
loans and receivables
loans and receivables are nonderivative ﬁnancial assets with ﬁxed or 
determinable payments that are not quoted in an active market such 
assets are carried at amortised cost using the effective interest method 
if the time value of money is signiﬁcant gains and losses are recognised 
in income when the loans and receivables are derecognised or impaired 
as well as through the amortisation process this category of ﬁnancial 
assets includes trade and other receivables
available for sale ﬁnancial assets
available for sale ﬁnancial assets are those nonderivative ﬁnancial 
assets that are not classiﬁed as loans and receivables or ﬁnancial 
assets at fair value through proﬁt or loss after initial recognition 
available for sale ﬁnancial assets are measured at fair value with gains 
or losses recognised within other comprehensive income until the 
investment is derecognised or until the investment is determined  
to be impaired at which time the cumulative gain or loss previously 
reported in other comprehensive income is included in the consolidated 
income statement note 1wiv describes the basis on which fair 
value is determined
financial assets at fair value through proﬁt or loss
financial assets at fair value through proﬁt or loss are measured at 
fair value after initial recognition the gain or loss is included in the 
consolidated income statement note 1wiv describes the basis  
on which fair value is determined
1 accounting policies continued
contingent consideration arising in a business combination that had 
been accounted for in accordance with ifrs 3 2004 that has not 
been settled or otherwise resolved at the effective date of ifrs 3 
revised continues to be accounted for in accordance with ifrs 3 
2004 contingent consideration is discounted to present value  
where the time value of money is material
viii noncurrent assets held for sale
the group classiﬁes noncurrent assets or disposal groups containing 
a noncurrent asset as held for sale if their carrying amount will be 
recovered principally through a sale transaction rather than through 
continuing use to be classiﬁed as held for sale the assets must be 
available for immediate sale in their present condition subject only  
to terms that are usual and customary for the sale of such assets  
and their sale must be highly probable sale is considered to be  
highly probable when management are committed to a plan to sell  
the assets and an active programme to locate a buyer and complete 
the plan has been initiated at a price that is reasonable in relation to 
their current fair value and there is an expectation that the sale will 
be completed within one year from the date of classiﬁcation
on initial classiﬁcation as held for sale noncurrent assets and 
disposal groups are measured at the lower of previous carrying 
amount and fair value less costs to sell with any adjustments taken  
to proﬁt or loss the same applies to gains and losses on subsequent 
remeasurement
any impairment loss on a disposal group is allocated ﬁrst to goodwill 
and then to remaining applicable assets on a pro rata basis except no 
loss is allocated to inventories ﬁnancial assets deferred tax assets or 
employee beneﬁt assets which continue to be measured in 
accordance with the group’s accounting policies
certain assetsliabilities are excluded from the measurement basis  
of ifrs 5 including deferred tax assets ias 12 income taxes assets 
arising from employee beneﬁts ias 19 employee beneﬁts and 
ﬁnancial assets within the scope of ias 39 financial instruments 
recognition and measurement
ix business combinations between entities under common control
the results of business combinations between entities under common 
control are incorporated as if the acquired entity had always been 
combined this is also known as ‘predecessor accounting’ where this 
applies all necessary comparatives for the prior year ﬁnancial statements 
are restated to reﬂect the inclusion of results from the commencement 
of the earliest comparative period in accordance with ias 8
d foreign currency
i foreign currency transactions
transactions in foreign currencies are translated at the foreign 
exchange rate ruling at the date of the transaction monetary assets 
and liabilities denominated in foreign currencies at the balance sheet 
date are translated to sterling at the foreign exchange rate ruling at 
that date foreign exchange differences arising on translation are 
recognised in the income statement except for differences arising  
on the retranslation of a ﬁnancial liability designated as a hedge of the 
net investment in a foreign operation or qualifying cash ﬂow hedges 
which are recognised directly in equity nonmonetary assets and 
liabilities that are measured in terms of historical cost in a foreign 
currency are translated using the exchange rate at the date of the 
transaction nonmonetary assets and liabilities denominated in 
foreign currencies that are stated at fair value are translated to 
sterling at foreign exchange rates ruling at the dates the fair  
values were determined financial statements
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group at a glance strategic overview business and ﬁnancial review governance financial statements shareholder information
financial statements
notes to the consolidated ﬁnancial statements continued
iv own shares held by the employee beneﬁt trusts
transactions of the groupsponsored employee beneﬁt trusts the 
trusts are included in the group’s consolidated ﬁnancial statements 
in particular the trusts’ purchase of shares in the company is debited 
directly in equity to retained earningsaccumulated losses
v short term beneﬁts
short term employee beneﬁts are measured on an undiscounted 
basis and are expensed as the related service is provided
j financial income and expenses
financial income comprises interest income on funds invested 
including available for sale ﬁnancial assets dividend income gains  
on the disposal of available for sale ﬁnancial assets and changes in the 
fair value of ﬁnancial assets or liabilities at fair value through proﬁt or 
loss interest income is recognised as it accrues in proﬁt or loss using 
the effective interest method dividend income is recognised in proﬁt 
or loss on the date that the group’s right to receive payment is 
established which in the case of quoted securities is the exdividend 
date foreign currency gains and losses are reported on a net basis
financial expenses comprise interest expense on borrowings 
unwinding of the discount on provisions changes in the fair value  
of ﬁnancial assets or liabilities at fair value through proﬁt or loss and 
impairment losses recognised on ﬁnancial assets all borrowing costs 
are recognised in proﬁt or loss using the effective interest method 
foreign currency gains and losses are reported on a net basis
k taxation
income tax comprises current and deferred tax income tax is 
recognised in the consolidated income statement except to the extent 
that it relates to items recognised in other comprehensive income or 
directly in equity in which case the related tax is also recognised in 
other comprehensive income or directly in equity as appropriate
i current tax
current tax is the expected tax payable on the taxable income for  
the period using tax rates enacted or substantively enacted at the 
balance sheet date and any adjustment to tax payable in respect of 
previous periods
ii deferred tax
deferred tax is provided or recognised using the balance sheet liability 
method providing for temporary differences between the carrying 
amounts of assets and liabilities for ﬁnancial reporting purposes and 
the amounts used for taxation purposes the following temporary 
differences are not provided for the initial recognition of goodwill  
not deductible for tax purposes the initial recognition of assets or 
liabilities in a transaction that is not a business combination and 
differences relating to investments in subsidiaries to the extent that 
they will probably not reverse in the foreseeable future the amount 
of deferred tax asset recognised is based on the expected manner  
of realisation or settlement of the carrying amount of assets and 
liabilities using the tax rate at which the asset or liability is expected 
to reverse in future periods based on tax laws enacted or substantively 
enacted at the balance sheet date
a deferred tax asset is recognised only to the extent that it is probable 
that future taxable proﬁts will be available against which the asset can 
be utilised deferred tax assets are reduced to the extent that it is no 
longer probable that the related tax beneﬁt will be realised
ii deﬁned beneﬁt plans
the group’s net obligation in respect of deﬁned beneﬁt pension plans 
is calculated separately for each plan by estimating the amount of 
future beneﬁt that employees have earned in return for their service 
in current and prior periods that beneﬁt is discounted to determine 
its present value and any unrecognised past service costs and the fair 
value of any plan assets is deducted in calculating the overall liability 
the liability discount rate is the yield at the balance sheet date on  
aa creditrated bonds denominated in the currency of and having  
the same maturity dates approximating to the terms of the group’s 
obligations the calculation is performed by a qualiﬁed actuary using 
the projected unit credit method
where the calculation results in a beneﬁt to the group the asset 
recognised is limited to the present value of any future refunds from 
the plan or reductions in future contributions to the plan which are 
under the control of the group
when the beneﬁts of a plan are amended the portion of the  
increasedecrease in beneﬁt relating to past services by employees  
is recognised as an expenseincome in the consolidated income 
statement on a straight line basis over the average period until  
the beneﬁts become vested to the extent that the beneﬁts vest 
immediately the expenseincome is recognised immediately in the 
consolidated income statement
all actuarial gains and losses are recognised in the period they  
occur directly in equity through the consolidated statement of 
comprehensive income either monthly or annual contributions are 
made to funded schemes the current service cost is included in the 
consolidated income statement as a personnel expense any change 
in the present value of pension scheme liabilities relating to employee 
service in prior periods but arising in the current period as a result of 
beneﬁt amendments is chargedcredited to operating expenses over 
the period during which such amendments vest
the expected return on the schemes’ assets and the increase during 
the period in the present value of the schemes’ liabilities arising from 
the passage of time are included in other ﬁnance income
iii sharebased payment transactions
the group’s share award programmes allow certain group employees 
to acquire shares of the company these shares are awarded by the 
company for equitysettled transactions the fair value of services  
is measured by the fair value of the shares at the time awarded and  
is recognised as an employee expense with a corresponding increase 
in equity the fair value is spread over the period during which the 
employee becomes entitled to the awards
for cashsettled transactions the resulting liability for the group is 
charged to expenses at its fair value as at the date of the performance 
of the service by the beneﬁciary until payment of this liability the  
fair value of the liability is remeasured at every reporting date and  
all changes are included in the consolidated income statement
for both types of sharebased payment transactions the fair value  
of the awards is measured using option valuation models taking into 
account the terms and conditions upon which the awards were made 
the amount recognised as an expense is adjusted to reﬂect the actual 
number of share awards that vest except where forfeiture is due only 
to market based performance conditions not meeting the threshold 
for vesting
i revenue recognition
revenue is recognised in the consolidated income statement when 
the signiﬁcant risks and rewards of ownership have been transferred 
to the buyer travel agency commissions and other revenues received 
from the sale of third party product are recognised when they are 
earned typically on receipt of ﬁnal payment revenue in respect of 
inhouse product is recognised on the date of departure revenue 
from individual travel modules directly booked by the customer  
with airlines hotels and incoming agencies is recognised when the 
customer departs or uses the respective service
no revenue is recognised if there are signiﬁcant uncertainties 
regarding recovery of the consideration due or associated costs
ii client monies received in advance deferred income
client monies received at the balance sheet date relating to holidays 
commencing and ﬂights departing after the year end are deferred  
and included within trade and other payables
iii valuation of revenue
where the group acts as principal revenue is stated at the contractual 
value of goods and services provided
where the group acts as an agent between the service provider  
and the end customer revenue is presented on a net basis as the 
difference between the sales price to the customer and the cost  
of the services purchased and not the total transaction sales value 
businesses are identiﬁed as intermediaries dependent on a number  
of criteria principally including the control exercised over the provision 
of service inventory risk and customer credit risk
iv aircraft lease income
operating lease rental incomes are recognised in operating income  
as earned on a straight line basis over the lease term
h expenses
i operating lease payments
payments made under operating leases are recognised in the 
consolidated income statement on a straight line basis over the  
term of the lease lease incentives received are recognised in the 
consolidated income statement as an integral part of the total  
lease expense over the term of the lease
ii finance lease payments
minimum lease payments are apportioned between the ﬁnance 
charge and the reduction of the outstanding liability the ﬁnance 
charge is allocated to each period during the lease term so as to 
produce a constant periodic rate of interest on the remaining  
balance of the liability
iii marketing and other direct sales costs
marketing advertising and other promotional costs including those 
related to the production of brochures are expensed when the beneﬁt 
of the goods or services is made available to the group in particular 
brochure and advertising costs are expensed to the consolidated 
income statement when the group’s suppliers have delivered the 
relevant material
i employee beneﬁts
i deﬁned contribution plans
obligations for contributions to deﬁned contribution pension plans 
are recognised as an expense in the consolidated income statement  
as incurred
1 accounting policies continued
when the forecast transaction subsequently results in the  
recognition of a nonﬁnancial asset or nonﬁnancial liability the 
associated cumulative gain or loss is removed from the hedging 
reserve and is included in the initial cost or other carrying amount of 
the nonﬁnancial asset or liability if a hedge of a forecast transaction 
subsequently results in the recognition of a ﬁnancial asset or a 
ﬁnancial liability the associated gains and losses that were recognised 
directly in equity are reclassiﬁed into the consolidated income 
statement in the same period or periods during which the asset 
acquired or liability assumed affects proﬁt or loss
for cash ﬂow hedges other than those covered by the preceding  
two paragraphs the associated cumulative gain or loss is removed 
from equity and recognised in the consolidated income statement  
in the same period or periods during which the hedged forecast 
transaction affects the consolidated income statement
prospective hedge testing is performed at the inception of the  
hedge relationship and subsequently at each balance sheet date 
through comparison of the critical terms of the hedged forecast 
transaction and the hedging instrument retrospective hedge testing 
is performed at each reporting date principally using a dollar offset 
analysis comparing the cumulative changes in the fair values of  
the forecast hedged transaction and the hedging instrument
when a hedging instrument no longer meets the criteria for hedge 
accounting expires or is sold terminated or exercised or the entity 
revokes designation of the hedge relationship hedge accounting is 
discontinued prospectively if the hedged forecast transaction is still 
expected to occur the cumulative gain or loss at that point remains in 
equity and is recognised in accordance with the above policy when the 
transaction occurs if the hedged transaction is no longer expected to 
take place the cumulative unrealised gain or loss recognised in equity 
is recognised in the consolidated income statement immediately
ii fair value hedges
where a derivative ﬁnancial instrument is designated as a hedge  
of the variability in fair value of a recognised asset or liability or an 
unrecognised ﬁrm commitment all changes in the fair value of the 
derivative are recognised immediately in the income statement  
the carrying value of the hedged item is adjusted by the change  
in fair value that is attributable to the risk being hedged even if  
it is normally carried at cost or amortised cost and any fair value 
gains or losses on remeasurement of the hedged risk are recognised 
immediately in the income statement even if those gains would 
normally be recognised directly in equity
g revenue
revenue represents the aggregate amount earned from inclusive 
tours scheduled and charter ﬂying provision of incoming agency 
destination services travel agency commission received and other 
services supplied to customers in the ordinary course of business 
revenue excludes intragroup transactions and is stated after the 
deduction of trade discounts and sales taxes revenue is reported 
gross of ﬁxed charges which are a liability of the tour operator or 
airline these include air passenger duty and other per passenger 
charges and levies including the atol protection contribution in  
the uk financial statements
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80 tui travel plc annual report  accounts 2011 tui travel plc annual report  accounts 2011 81
group at a glance strategic overview business and ﬁnancial review governance financial statements shareholder information
financial statements
notes to the consolidated ﬁnancial statements continued
if the leaseback is classiﬁed as an operating lease then any gain  
is recognised immediately if the sale and leaseback terms are 
demonstrably at fair value otherwise the sale and leaseback is 
accounted for as follows
• if the sale price is below fair value then the gain or loss is 
recognised immediately other than to the extent that a loss  
is compensated for by future rentals at a belowmarket price  
then the loss is deferred and amortised over the period that  
the asset is expected to be used
• if the sale price is above fair value then any gain is deferred  
and amortised over the useful life of the asset
• if the fair value of the asset is less than the carrying amount of  
the asset at the date of the transaction then that difference is 
recognised immediately as a loss on the sale
q impairments
i financial assets
a ﬁnancial asset is assessed at each reporting date to determine 
whether there is any objective evidence that it is impaired a ﬁnancial 
asset is considered to be impaired if objective evidence indicates that 
one or more events have had a negative effect on the estimated 
future cash ﬂows of that asset
an impairment loss in respect of a ﬁnancial asset is calculated as the 
difference between its carrying amount and its recoverable amount 
an impairment loss in respect of an available for sale ﬁnancial asset  
is calculated by reference to its fair value the recoverable amount  
of the group’s receivables which are carried at amortised cost is 
calculated as the present value of estimated future cash ﬂows 
discounted at the original effective interest rate ie the effective 
interest rate computed at initial recognition of these ﬁnancial assets 
receivables with a short duration are not discounted
individually signiﬁcant ﬁnancial assets are tested for impairment  
on an individual basis the remaining ﬁnancial assets are assessed 
collectively in groups that share similar credit risk characteristics
all impairment losses are recognised in proﬁt or loss any cumulative 
loss in respect of an available for sale ﬁnancial asset previously 
recognised in equity is transferred to proﬁt or loss an impairment 
loss is reversed if the reversal can be related objectively to an event 
occurring after the impairment loss was recognised for ﬁnancial 
assets measured at amortised cost and available for sale ﬁnancial 
assets that are debt securities the reversal is recognised in proﬁt or 
loss for available for sale ﬁnancial assets that are equity securities 
the reversal is recognised directly in equity
ii nonﬁnancial assets
the carrying amount of the group’s nonﬁnancial assets other than 
inventory and deferred tax assets are reviewed at each balance sheet 
date to determine whether there is any indication of impairment if 
such an indication exists the asset’s recoverable amount is estimated 
for goodwill the recoverable amount is estimated at each balance 
sheet date
an impairment loss is recognised whenever the carrying amount of  
an asset or its cgu exceeds its recoverable amount the recoverable 
amount of an asset or cgu is the greater of its value in use and fair 
value less costs to sell in assessing value in use the estimated future 
cash ﬂows are discounted to their present value using a pretax discount 
rate that reﬂects current market assessments of the time value of money 
and the risks speciﬁc to the asset a cgu is the smallest identiﬁable 
group of assets that generates cash inﬂows that are largely independent 
of the cash inﬂows from other assets or groups of assets the largest 
unit to which goodwill is allocated is an operating segment level as 
deﬁned in ifrs 8 before applying aggregation criteria
where signiﬁcant parts of an item of property plant and equipment 
have different useful lives they are accounted for as separate items  
of property plant and equipment
ii leased assets
leases in which the group assumes substantially all the risks and 
rewards of ownership are classiﬁed as ﬁnance leases leased assets 
acquired by way of a ﬁnance lease are stated at an amount equal to 
the lower of their fair value and the present value of the minimum 
lease payments at the inception of the lease less accumulated 
depreciation and impairment losses lease payments are accounted 
for as set out in note 1h above
iii depreciation
depreciation is charged to the consolidated income statement on  
a straight line basis over the estimated useful economic lives of each 
part of an item of property plant and equipment freehold land is  
not depreciated the useful economic lives are as follows
freehold properties up to 50 years
short leasehold improvements  lease period or useful 
economic life if shorter
owned aircraft up to 18 years
finance leased aircraft and equipment  lease period or useful 
economic life if shorter
aircraft spares 12 years
cruise ships 40 years
yachts 515 years
motor boats 1524 years
computer equipment including  
retail computer equipment 35 years
retail ﬁxtures and ﬁttings 8 years
other assets 4 years
the cost of major overhauls of owned airframes and engines is 
capitalised and depreciated over the period until the next scheduled 
major overhaul
the depreciation methods useful economic lives and residual  
values are reassessed annually revisions to useful economic lives  
and residual values are accounted for prospectively from the date  
of change
assets under construction and advance payments including 
capitalised borrowing costs for future aircraft are not depreciated 
upon the delivery of the aircraft the advance payments are 
recategorised to aircraft assets and depreciation is commenced
iv borrowing costs
in respect of borrowing costs relating to qualifying assets the group 
capitalises borrowing costs directly attributable to the acquisition 
construction or production of a qualifying asset as part of the cost  
of that asset
the group has capitalised borrowing costs with respect to  
predelivery payments relating to aircraft
v sale and leaseback transactions
when a sale and leaseback results in a ﬁnance lease any gain on  
the sale is deferred and recognised as income over the lease term 
any loss on the sale is immediately recognised as an impairment  
loss when the sale occurs
ii computer software and other intangible assets
computer software consists of all software that is not an integral  
part of the related computer hardware and is stated at cost less 
accumulated amortisation and impairment losses
costs associated with maintaining computer software programmes 
are recognised as an expense as incurred development costs that are 
directly attributable to the design and testing of identiﬁable and 
unique software products controlled by the group are recognised as 
intangible assets when the following criteria are met
• it is technically feasible to complete the software product so that it 
will be available for use
• management intends to complete the software product and use or 
sell it
• there is an ability to use or sell the software product
• it can be demonstrated how the software product will generate 
probable future economic beneﬁts
• adequate technical ﬁnancial and other resources to complete the 
development and to use or sell the software product are available
• the expenditure attributable to the software product during its 
development can be reliably measured
directly attributable costs that are capitalised as part of the software 
product include the software development employee costs and an 
appropriate portion of relevant overheads
other development expenditures that do not meet these criteria are 
recognised as an expense as incurred development costs previously 
recognised as an expense are not recognised as an asset in a 
subsequent period
separately acquired trademarks and licences are shown at historical 
cost licences acquired in a business combination are recognised at 
fair value at the acquisition date licences have a ﬁnite useful life and 
are carried at cost less accumulated amortisation
iii contractual customer relationships
contractual customer relationships acquired in a business 
combination are recognised at fair value at the acquisition date the 
contractual customer relations have a ﬁnite useful life and are carried 
at cost less accumulated amortisation
iv amortisation
amortisation is charged to the consolidated income statement on  
a straight line basis over the estimated useful economic life of each 
type of intangible asset as follows
computer software 310 years
brands 1520 years
order book at date of acquisition over the period until travel occurs
customer relationships  over the period during which value will be 
obtained by the group up to 15 years
licences over the term of licence
software in development is not amortised upon completion of 
development and bringing the software into use the costs are 
recategorised into computer software and amortisation commences
p property plant and equipment
i owned assets
items of property plant and equipment are stated at cost less 
accumulated depreciation and impairment losses cost includes the 
original purchase price of the asset and the costs attributable to 
bringing the asset to its working condition for its intended use
1 accounting policies continued
l dividends
dividend distribution to the company’s shareholders is recognised  
as a liability in the group’s ﬁnancial statements in the period in which 
the dividends are appropriately authorised and approved for payment 
and are no longer at the discretion of the company unpaid dividends 
that do not meet these criteria are disclosed in the notes to the 
ﬁnancial statements
m earnings per share
the group presents basic and diluted earnings per share eps data 
for its ordinary shares basic eps is calculated by dividing the proﬁt  
or loss attributable to ordinary shareholders of the company by the 
weighted average number of ordinary shares outstanding during the 
period diluted eps is determined by adjusting the weighted average 
number of ordinary shares outstanding for the effects of all dilutive 
potential ordinary shares eps measures for continuing operations 
have been presented in accordance with ias 33 the group also 
presents a basic and diluted underlying eps measure based on 
underlying earnings as deﬁned in note 1biii above further  
details of the eps calculation are presented in note 32
n investments
unless designated at fair value through proﬁt and loss trade 
investments are classiﬁed as available for sale assets and are  
included under noncurrent assets they are recorded at fair value 
with movements in value taken to other comprehensive income  
any impairment to value is recorded in the income statement
short term investments in debt and equity securities which are held 
for trading are classiﬁed as current assets and are stated at fair value 
with any resultant gain or loss recognised in the income statement
o intangible assets
i goodwill
all business combinations are accounted for by applying the  
purchase method
goodwill represents amounts arising on acquisition of subsidiaries 
joint ventures and associates goodwill represents the difference 
between the fair value of consideration paid or payable and the net 
fair value of the identiﬁable assets liabilities and contingent liabilities 
acquired identiﬁable intangibles such as brands and customer 
relationships are those which can be sold separately or which arise 
from contractual or legal rights regardless of whether those rights  
are separable and the fair value can be reliably measured goodwill  
is stated at cost less any accumulated impairment losses
goodwill is allocated to those cash generating units cgus expected 
to beneﬁt from the business combination and is not amortised but 
tested annually for impairment impairment testing is based on assets 
grouped at the lowest level at which goodwill is monitored for internal 
management purposes in respect of joint ventures and associates 
the carrying amount of goodwill is included in the carrying amount  
of the investment in the joint venture or associate
fair value adjustments are made in respect of acquisitions if at  
the balance sheet date the amounts of fair values of the acquiree’s 
identiﬁable assets and liabilities can only be established provisionally 
then these values are used any adjustments to these values are 
taken as adjustments to goodwill and must be recorded within  
12 months of the acquisition negative goodwill arising on an 
acquisition is recognised in the income statement upon acquisition financial statements
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82 tui travel plc annual report  accounts 2011 tui travel plc annual report  accounts 2011 83
group at a glance strategic overview business and ﬁnancial review governance financial statements shareholder information
financial statements
notes to the consolidated ﬁnancial statements continued
ix sharebased payments
the fair value of the shares awarded is measured using option 
valuation models taking into account the terms and conditions upon 
which the awards were made the valuation basis is identical whether 
the awards will be settled in cash or shares
x new standards and interpretations not yet adopted
the following standards which are applicable to the group have been 
endorsed by the european union and will be applied for all accounting 
periods beginning as of 1 october 2011
ias 24 revised ‘related party disclosures’ supercedes ias 24 ‘related 
party disclosures’ the new standard is mandatory for periods beginning 
on or after 1 january 2011 and will be applied by the group for the 
accounting period commencing 1 october 2011 the group has not 
adopted this new standard early the revised standard simpliﬁes and 
clariﬁes the deﬁnition of a related party enlarges the scope of what is 
a related party such as subsidiaries of associated companies whilst it 
removes the requirement for governmentrelated entities to disclose 
details of all transactions with the government and other government
related entities as this standard relates to disclosures there is not 
expected to be an impact on the group’s ﬁnancial statements in 
future years
amendment to ifric 14 ‘prepayments of a minimum funding 
requirement’ is effective for annual periods commencing 1 january 
2011 and will be applied by the group for the accounting period 
commencing 1 october 2011 the amendment removes an 
unintended consequence of ifric 14 related to voluntary pension 
prepayments when there is a minimum funding requirement the 
amendment has been endorsed by the eu but is not expected to  
have a signiﬁcant impact on the group’s ﬁnancial statements
amendments to ifrs 7 ‘financial instruments disclosures’ and to 
ifrs 1 on hyperinﬂation and ﬁxed dates are effective for accounting 
periods commencing 1 july 2011 the amendment to ifrs 7 relates  
to disclosures and is not expected to have an impact on the group’s 
results the amendment to ifrs 1 is not expected to have a signiﬁcant 
impact on the group’s ﬁnancial statements in future years these two 
amendments have not yet been endorsed by the eu
the following standards revisions and amendments to current 
standards which have been issued and are applicable to the group 
but which have not yet been endorsed by the eu are as follows
 effective date accounting  
standard periods commencing on or after 
ifrs 9 ‘financial instruments’ 1 january 2013
ifrs 10 ‘consolidated financial statements’ 1 january 2013
ifrs 11 ‘joint arrangements’ 1 january 2013
ifrs 12 ‘disclosure of interests in other entities’ 1 january 2013
ifrs 13 ‘fair value measurement’ 1 january 2013
ias 19 revised 2011 ‘employee beneﬁts’ 1 january 2013
ias 27 revised 2011 ‘separate financial statements’ 1 january 2013
amendment to ias 12 ‘income taxes’ 1 january 2012
amendment to ias 1 ‘presentation of  
financial statements on oci’ 1 july 2012
ifrs 9 ‘financial instruments’ is the ﬁrst step in the process to replace 
ias 39 ‘financial instruments recognition and measurement’ ifrs 9 
introduces new requirements for classifying and measuring ﬁnancial 
assets the iasb has issued an exposure draft that proposes to delay 
the effective date of ifrs 9 ‘financial instruments’ to annual periods 
beginning on or after 1 january 2015
i property plant and equipment
the fair value of property plant and equipment recognised as a  
result of a business combination is based on market values the 
market value of property is the estimated amount for which a 
property could be exchanged on the date of valuation between a 
willing buyer and a willing seller in an arm’s length transaction after 
proper marketing wherein the parties had each acted knowledgeably 
prudently and without compulsion the market value of items of 
plant equipment ﬁxtures and ﬁttings is based on the quoted market 
prices for similar items
ii intangible assets
the fair value of intangible assets recognised as a result of a business 
combination including brands customer relationships and the 
customer order book at the date of acquisition is valued by reference 
to external market values or incomebased methods incomebased 
methods estimate the future economic beneﬁts to be derived from 
ownership of the asset by identifying quantifying and separating cash 
ﬂows attributable to the asset and capitalising their present value
iii inventories
the fair value of inventories acquired in a business combination  
is determined based on the estimated selling price in the ordinary 
course of business less the estimated costs of completion and sale 
and a reasonable proﬁt margin based on the effort required to 
complete and sell the inventories
iv investments in equity and debt securities
the fair value of ﬁnancial assets at fair value through proﬁt or loss 
and available for sale ﬁnancial assets is determined by reference to 
their quoted closing bid price at the reporting date where available  
if there is no market price available the fair value is calculated based 
on other valuation techniques including assessments of future cash 
ﬂows estimated selling price and other available information the  
fair value of held to maturity investments is determined on initial 
recognition and thereafter for disclosure purposes only
v trade and other receivables
trade receivables are recognised at their fair value and subsequently 
recorded at amortised cost using the effective interest method as 
reduced by allowances for estimated irrecoverable amounts an 
allowance for irrecoverable amounts is established when there is 
objective evidence that the group will not be able to collect all 
amounts due according to the original terms of the receivables the 
amount of allowance is the difference between the asset’s carrying 
amount and the present value of estimated future cash ﬂows
vi trade payables
trade payables are recognised at their fair value and subsequently 
recorded at amortised cost using the effective interest method
vii derivatives
the fair value of foreign currency contracts fuel forward contracts 
and option contracts is their forward market price at the balance 
sheet date based on external valuations or internal valuations using 
market data
viii nonderivative ﬁnancial liabilities
fair value which is determined for disclosure purposes is calculated 
based on the present value of future principal and interest cash ﬂows 
discounted at the market rate of interest at the reporting date for 
ﬁnance leases the market rate of interest is determined by reference 
to similar lease agreements
iii onerous contracts
a provision for onerous contracts is recognised when the expected 
beneﬁts to be derived by the group from the contract are lower than 
the unavoidable cost of meeting its obligations under the contract 
the provision is measured at the present value of the lower of the 
expected cost of terminating the contract and the expected net cost 
of continuing with the contract before a provision is established the 
group recognises any impairment loss on the assets associated with 
that contract
t related parties
for the purpose of these consolidated ﬁnancial statements parties 
are considered to be related to the group if the group has the ability 
directly or indirectly to control the party or exercise signiﬁcant 
inﬂuence over the party making ﬁnancial and operating decisions or 
vice versa or where the group and the party are subject to common 
control or common signiﬁcant inﬂuence related parties may be 
individuals or other entities
u segment reporting
an operating segment is a component of an entity that
• engages in business activities from which it may earn revenues  
and incur expenses including revenues and expenses relating  
to transactions with other components of the same entity
• whose operating results are regularly reviewed by the group 
management board gmb to make decisions about resources  
to be allocated to the segment and assess its performance
• for which discrete ﬁnancial information is available
as described in note 3 all underlying operating items are allocated  
to the segment’s underlying proﬁt except central costs and net 
ﬁnancial expenses
segment information for total assets is only disclosed if such information 
is regularly reported to the chief operating decision maker
v use of estimates and judgments
the preparation of ﬁnancial statements requires management to make 
judgments estimates and assumptions that affect the application  
of accounting policies and the reported amounts of assets liabilities 
income and expenses actual results may differ from these estimates
estimates and underlying assumptions are reviewed on an ongoing 
basis revisions to accounting estimates are recognised in the period 
in which the estimates are revised and in any future periods affected 
details of critical judgments signiﬁcant estimates and assumptions 
are disclosed in the relevant notes to the consolidated ﬁnancial 
statements the key accounting estimates and judgments are 
described in note 2
w determination of fair values
a number of the group’s accounting policies and disclosures require 
the determination of fair value for both ﬁnancial and nonﬁnancial 
assets and liabilities fair values have been determined for measurement 
andor disclosure purposes based on the following methods when 
applicable further information about the assumptions made in 
determining fair values is disclosed in the notes speciﬁc to that asset 
or liability
1 accounting policies continued
impairment losses are recognised in proﬁt or loss impairment losses 
recognised in respect of cgus are allocated ﬁrst to reduce the 
carrying amount of goodwill allocated to the cgu and then to reduce 
the carrying amount of other assets in the unit on a pro rata basis
an impairment loss in respect of goodwill is not reversed in respect 
of other assets impairment losses recognised in prior periods are 
assessed at each reporting date for any indications that the loss has 
decreased or no longer exists an impairment loss is reversed if there 
has been a change in the estimates used to determine the recoverable 
amount an impairment loss is reversed only to the extent that the 
asset’s carrying amount does not exceed the carrying amount that 
would have been determined net of depreciation or amortisation  
if no impairment loss had been recognised
r inventories
inventories are measured at the lower of cost or net realisable value 
net realisable value is the estimated selling price less the estimated 
costs incurred until the sale and the estimated variable costs required 
to sell all inventories are written down individually where the net 
realisable value of inventories is lower than their carrying amounts 
the measurement method applied to similar inventory items is the 
weighted average cost formula
s provisions
a provision is recognised in the consolidated balance sheet when the 
group has a legal or constructive obligation as a result of a past event 
it is probable that an outﬂow of economic beneﬁts will be required  
to settle the obligation and the outﬂow of economic beneﬁts can be 
reliably estimated if the effect is material provisions are determined 
by discounting the expected future cash ﬂows at a pretax rate that 
reﬂects current market assessments of the time value of money and 
the risks speciﬁc to the liability
i maintenance provision for leased aircraft
to reﬂect the legal obligations placed upon the group under  
the terms of certain operating leases provision is made for  
the maintenance overhaul and repair costs of operating leased 
airframes engines and certain other components the provision  
is based on the present value of total anticipated external costs  
over the useful economic life of the asset calculated by reference to 
costs experienced and published manufacturers’ data the charge  
to the consolidated income statement is calculated by reference to 
the number of hours and cycles ﬂown and by reference to the length  
of the full overhaul cycle costs incurred are charged against the 
provision neither the timing nor the value of the expenditure can  
be precisely determined but they can be averaged over time and  
over a ﬂeet the unwinding of discounted values is charged to the 
consolidated income statement as a ﬁnancial expense
the cost of major overhauls of owned airframes and engines  
is capitalised and depreciated over the period until the next  
scheduled major overhaul
ii restructuring provision
a provision for restructuring is recognised when the group  
has approved a detailed and formal restructuring plan and the 
restructuring either has commenced or has been announced  
publicly future operating costs are not provided for financial statements
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group at a glance strategic overview business and ﬁnancial review governance financial statements shareholder information
the emerging markets sector is a growing portfolio of travel 
businesses currently focusing on the speciﬁc source markets of 
russia and ukraine and is considered to be one operating segment
reportable and reported segments
under ifrs 8 the results of the uk  ireland and germany are 
reported separately within the northern region and central europe 
respectively due to the size and importance of these core markets 
and both meet the threshold of being individual reportable segments 
the results of nordics are shown separately from other northern 
region segments as it exceeds the quantitative threshold deﬁned in 
ifrs 8 canada and the hotels division have been reported separately 
as these two segments do not meet the majority of the aggregation 
criteria of ifrs 8
the results of austria switzerland and poland have been aggregated 
into the rest of central europe segment as these are considered to 
be economically similar over the long term and their activities are also 
considered to be similar in nature under the aggregation criteria of 
ifrs 8
the french airline corsair has been separately disclosed from the 
rest of western europe because as a scheduled airline within the 
group it has a different business model to the rest of the group’s 
integrated tour operators following the representation of jet4you  
as a continuing operation this segment has also been disclosed 
separately as it does not meet the aggregation criteria of ifrs 8 
belgium the netherlands southern europe and the french tour 
operating businesses form the rest of western europe as these 
segments meet the aggregation criteria
the specialist  activity sector is reported separately as this qualiﬁes 
as a reportable segment under ifrs 8 the results of accommodation 
 destinations and emerging market sectors are reported voluntarily 
to be consistent with internal management reporting
segmental information for both the current and prior year has been 
presented using this new structure with the prior year information 
being restated for the change in structure as well as in respect of  
the restatement for magic life and jet4you being represented as  
a continuing operation
corporate costs are in respect of central costs including ﬁnance 
human resources legal facility costs and some information 
technology costs that do not relate to each business segment  
and hence they are not allocated
information regarding the results of each reportable segment  
is provided below segmental performance is evaluated based  
on underlying operating proﬁt and is measured consistently with 
underlying operating proﬁt or loss in the consolidated ﬁnancial 
statements and as deﬁned in note 1biii
intersegmental sales and transfers reﬂect arm’s length prices as if 
sold or transferred to third parties financial income and expenses are 
not allocated to the reportable segments as this activity is managed 
by the group’s treasury function which manages the overall net debt 
position of the group
no one customer exceeds 10 of entity revenues in any segment 
intangible asset impairment losses arising are detailed in note 10  
and are recognised in the consolidated income statement
segment assets comprise capital expenditure as this is the only 
measure of assets reported monthly to the gmb and represent  
the amounts purchased in the year
recoverable amounts of deposits and prepayments
judgments have been made in respect of the volumes of future 
trading with hoteliers and the creditworthiness of those hoteliers  
in order to assess the recoverable amounts of deposits and 
prepayments made to those hoteliers
fair value measurements
management has to make judgments regarding the valuation of some 
ﬁnancial instruments that use inputs that are not observable in active 
markets these are disclosed in note 25h
3 segmental information
ifrs 8 requires segment information to be presented on the same 
basis as that used for internal management reporting segmental 
information is reported by the group’s business sectors to the gmb 
the gmb consists of tour operating and functional experts drawn 
from across the group and who execute tui travel’s daytoday 
operations and allocate resources to and assess the performance  
of the operating segments consequently the gmb is considered  
to be the chief operating decision maker for the purposes of ifrs 8
group structure
the group presents segmental information in respect of its four 
sectors as disclosed in the 2010 annual report  accounts on  
1 october 2010 the group reorganised its sectors from that of last 
year the mainstream sector remains largely unchanged in terms  
of the regions that are within it the remaining three sectors were 
reﬁned and renamed to reﬂect the strategic priorities of tui travel  
as it develops and are now specialist  activity accommodation  
destinations and emerging markets
the four sectors are divided into either regions mainstream sector 
or divisions sectors other than mainstream which are further sub 
divided into operating segments aggregation criteria is then used to 
combine certain of these operating segments into reported segments
the mainstream sector consists of three regions northern central 
europe and western europe the northern region comprises the 
distribution tour operating businesses and airlines in the uk  ireland 
canada the nordic countries comprising the markets of sweden 
norway denmark and finland and the hotels division comprising 
hotel management companies and joint ventures in hotel assets
central europe comprises the distribution tour operating businesses and 
airline in the source markets of germany austria switzerland and poland
western europe comprises the distribution tour operating businesses 
and airline in france belgium the netherlands and southern europe 
comprising spain and italy and the moroccan based airline jet4you
each source market within each region represents an operating 
segment for the purposes of segmental information
the specialist  activity sector operates under six divisions – 
adventure education marine north american specialist sport and 
specialist holidays group the sector has over 100 specialist and 
activity international brands delivering a range of unique customer 
experiences the specialist  activity sector is considered to be  
one operating segment in line with internal management reporting
the accommodation  destinations sector ad sells and provides  
a range of services in destinations to tour operators travel agents 
corporate clients and direct to the consumer worldwide ad is 
structured along the following divisions – business to business b2b 
business to customer b2c and specialist although the ad sector 
in total is considered as one operating segment in line with internal 
management reporting
financial statements
notes to the consolidated ﬁnancial statements continued
deﬁned beneﬁt pension plans
a qualiﬁed independent actuary undertakes the estimation of  
the present value of the group’s obligations under deﬁned beneﬁt 
pension schemes using assumptions taken from a range of possible 
actuarial assumptions these assumptions may not be borne out in 
practice especially due to the long timescales involved in particular 
the valuation of scheme assets is based on the fair value at the 
balance sheet date as these assets are not intended to be sold in the 
short term their value may change signiﬁcantly prior to realisation in 
reviewing the work of the qualiﬁed independent actuary management 
was required to exercise judgment to satisfy itself that appropriate 
weight had been afforded to macroeconomic factors details of the 
actual assumptions used including sensitivity analysis are set out in 
note 6c
derivative ﬁnancial instruments
judgment is required in the assessment of prospective effectiveness 
and speciﬁcally in the assessment of the probability of forecast 
transactions both at hedge inception and during the period over 
which hedge accounting is adopted the fair value of derivative 
ﬁnancial instruments can also involve judgment where appropriate 
external valuations from ﬁnancial institutions are undertaken to 
support the carrying value of such items details of sensitivity analysis 
are set out in note 25l
b judgments
separately disclosed items
separately disclosed items are those signiﬁcant items which in 
management’s judgment are highlighted by virtue of their size  
or incidence to enable a full understanding of the group’s ﬁnancial 
performance such items are included within the income statement 
caption to which they relate notes 4 and 5
business combinations
judgment and estimation is required in the identiﬁcation and 
valuation of separable assets and liabilities on acquisitions in 
particular judgment and estimation is required in the identiﬁcation 
and valuation of separable intangible assets being brands orders 
books and customer databases and determining appropriate useful 
economic lives for these assets judgment and estimation is also 
required in determining contingent consideration payable in respect 
of acquisitions details of acquisitions are set out in note 13
liabilities
in accounting for provisions judgment is required in determining 
occurrence probability maturity and level of risk judgment and 
estimation is required in determining aircraft maintenance 
restructuring and onerous lease provisions due to the volume of 
transactions and the materiality of period end accruals judgment  
is also required in respect of the recognition and derecognition of 
airline and accommodation operating accruals details of provisions 
made and the basis on which the provision has been calculated is 
disclosed in note 21 and the accounting policy is set out in note 1s
taxation
the group has from time to time contingent tax liabilities arising 
from trading and corporate transactions in the uk and overseas 
jurisdictions after taking appropriate external advice the group 
makes provision for these liabilities based on the probable level  
of economic loss that may be incurred and which is reliably 
measurable judgment is also required in the assessment of  
the future recoverability of tax losses and recognition of deferred  
tax assets details of unrecognised tax losses are given in note 14
1 accounting policies continued
ifrs 10 ‘consolidated financial statements’ establishes principles for 
the presentation and preparation of consolidated ﬁnancial statements 
when an entity controls one or more other entities the ifrs 
supersedes ias 27 ‘consolidated and separate financial statements’ 
and sic12 ‘consolidation – special purpose entities’ ias 27 revised 
2011 ‘separate ﬁnancial statements’ has therefore also been revised
ifrs 11 ‘joint arrangements’ establishes principles for ﬁnancial 
reporting by parties to a joint arrangement the ifrs supersedes  
ias 31 interests in joint ventures and sic13 ‘jointly controlled 
entities – nonmonetary contributions by venturers’ the ifrs is 
concerned principally with both the structure of the arrangement  
and that an entity had a choice of accounting treatment for interests 
in jointly controlled entities
ifrs 12 ‘disclosure of interests in other entities’ applies to entities 
that have an interest in a subsidiary a joint arrangement an associate 
or an unconsolidated structured entity the ifrs requires an entity  
to disclose information that enables users of ﬁnancial statements to 
evaluate both the nature of and risks associated with its interests  
in other entities and the effects of those interests on its ﬁnancial 
position ﬁnancial performance and cash ﬂows
ifrs 13 ‘fair value measurement’ deﬁnes fair value sets out in  
a single ifrs a framework for measuring fair value and requires 
disclosures about fair value measurements
the amendment to ias 19 ‘employee beneﬁts’ makes signiﬁcant 
changes to the recognition and measurement of deﬁned beneﬁt 
pension expense and termination beneﬁts and to the disclosures  
for all employee beneﬁts
the group continues to monitor the potential impact of these and 
other new standards and interpretations which may be endorsed by 
the european union and require adoption by the group in future 
accounting periods
2 key accounting estimates and judgments
the preparation of consolidated ﬁnancial statements under adopted 
ifrss requires the directors to make estimates and judgments that 
affect the reported amounts of assets and liabilities the disclosure of 
contingent assets and liabilities and the reported amount of revenue 
and expenses during the year the directors evaluate the estimates 
and judgments on an ongoing basis such estimates and judgments 
are based upon historical experience and other factors it believes to 
be reasonable under the circumstances actual results may differ 
from estimates
management has discussed with the audit committee the 
development selection and disclosure of the group’s critical 
accounting policies and estimates and the applications of these 
policies and estimates key estimates and judgments have been  
made in respect of the following areas
a estimates
intangible assets – goodwill carrying value
a full impairment review has been performed of all goodwill and 
intangibles balances held across the group on a cgu basis the 
impairment review is performed on a ‘value in use’ basis with the 
exception of one cgu which is performed upon a fair value less costs 
to sell basis which requires estimation of future net operating cash 
ﬂows the time period over which they will occur an appropriate 
discount rate and an appropriate growth rate further details 
including sensitivity analysis are given in note 10 and the accounting 
policy is set out in note 1q financial statements
notes to the consolidated ﬁnancial statements continued
financial statements
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86 tui travel plc annual report  accounts 2011 tui travel plc annual report  accounts 2011 87
group at a glance strategic overview business and ﬁnancial review governance financial statements shareholder information
3 segmental information continued
year ended 30 september 2011
        underlying
      intersegmental  total external operating
     total revenue revenue revenue proﬁtloss
sector     £m £m £m £m
uk  ireland     3648 60 3588 149
canada     – – – 18
nordics     1055 1 1054 70
hotels     184 155 29 13
total northern region     4887 216 4671 250
germany     4261 26 4235 89
rest of central europe     666 60 606 14
total central europe     4927 86 4841 103
french airline     426 70 356 10
jet4you     88 7 81 10
rest of western europe     2717 3 2714 37
total western europe     3231 80 3151 17
total mainstream     13045 382 12663 370
specialist  activity     1373 1 1372 65
accommodation  destinations     879 227 652 72
emerging markets     – – – 12
all other segments and unallocated items     – – – 24
total group     15297 610 14687 471
year ended 30 september 2010
        underlying
      intersegmental  total external operating
     total revenue revenue revenue proﬁtloss
     restated restated restated restated
sector     £m £m £m £m
uk  ireland     3399 61 3338 108
canada     52 – 52 5
nordics     861 2 859 54
hotels     171 108 63 5
total northern region     4483 171 4312 162
germany     3812 29 3783 74
rest of central europe     623 52 571 11
total central europe     4435 81 4354 85
french airline     395 56 339 25
jet4you     91 – 91 13
rest of western europe     2503 13 2490 76
total western europe     2989 69 2920 38
total mainstream     11907 321 11586 285
specialist  activity     1347 – 1347 77
accommodation  destinations     790 209 581 73
emerging markets     – – – 7
all other segments and unallocated items     – – – 29
total group     14044 530 13514 399
reconciliation of group underlying operating proﬁt to proﬁtloss before tax
        restated
       year ended year ended
       30 september 30 september
       2011 2010
      note £m £m
group underlying operating proﬁt       471 399
separately disclosed items      4 74 255
predecessor accounting for magic life      1 17 19
acquisition related expenses      13 82 63
impairment of goodwill      10 39 12
taxation on proﬁts and interest of joint ventures and associates    12 4 6
operating proﬁt      1 3 255 44
net ﬁnancial expenses      5 111 117
proﬁtloss before tax       144 73
financial statements
notes to the consolidated ﬁnancial statements continued
other segmental information
    total depreciation of property  
    plant and equipment and
   capital expenditure amortisation of intangible assets
    
      restated  restated
     2011  2010 2011  2010
     £m £m £m £m
uk  ireland     103 188 83 84
nordics     12 5 5 4
hotels     18 14 11 9
total northern region     133 207 99 97
germany     15 24 13 35
rest of central europe     3 2 3 4
total central europe     18 26 16 39
french airline     58 22 19 22
jet4you     – 1 1 –
rest of western europe     26 21 29 37
total western europe     84 44 49 59
total mainstream     235 277 164 195
specialist  activity     53 31 44 36
accommodation  destinations     25 19 30 34
all other segments and unallocated items     7 1 – –
total group     320 328 238 265
total depreciation of property plant and equipment and amortisation of intangible assets of £238m 2010 restated £265m comprises £101m 
2010 £94m of amortisation of intangible assets as shown in note 10 and £137m 2010 restated £171m of depreciation as shown in note 11
reconciliation of capital expenditure to amounts included in the ﬁnancial statements
        restated
       year ended  year ended
       30 september 30 september
       2011 2010
      note £m £m
total group capital expenditure as shown above      320 328
analysed as
additions to intangible assets       53 43
additions to property plant and equipment       267 285
       320 328
reconciliation to the notes to the ﬁnancial statements
additions to intangible assets in segmental analysis      53 43
additions to goodwill       – 1
intangible assets total additions      10 53 44
additions to property plant and equipment in segmental analysis     267 285
property plant and equipment total additions     11 267 285
entity wide disclosures
the uk is the group’s country of domicile revenues from external customers and noncurrent assets are split geographically as follows
 uk germany france other europe rest of the world total
      
    restated  restated  restated  restated  restated
 2011 2010 2011 2010 2011 2010 2011 2010 2011 2010 2011 2010
 £m £m £m £m £m £m £m £m £m £m £m £m
revenue from  
external customers 4454 4134 4248 3727 1396 1313 3883 3524 706 816 14687 13514
noncurrent assets 2655 2685 589 639 431 510 1176 1079 830 758 5681 5671
revenue is classiﬁed based on the source of the supply in addition to the united kingdom revenue relating to an individual country is separately 
disclosed when it represents 10 or more of total revenue other europe is deﬁned as continental europe and eire excluding uk germany and 
france noncurrent assets for the table above excludes all ﬁnancial instruments deferred tax assets and postemployment beneﬁt assets in 
accordance with ifrs 8 financial statements
notes to the consolidated ﬁnancial statements continued
financial statements
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group at a glance strategic overview business and ﬁnancial review governance financial statements shareholder information
items relating to the prior year
during the current ﬁnancial year two errors have been identiﬁed which relate to the balance sheet as at 30 september 2010 the omission of an 
elimination of surplus sundry payables from the group balance sheet resulted in an overstatement of current liabilities of £38m this was offset 
by an understatement of current liabilities within nouvelles frontières the french tour operator of £45m as both errors offset within cost of 
sales and trade and other payables and do not materially change the proﬁt net assets or overall ﬁnancial position of the group the prior year 
has not been restated the correction of the errors has been made through the consolidated income statement account in the year ended 30 
september 2011 we have addressed the underlying causes of these errors within the businesses concerned and are introducing a groupwide 
compliance framework as part of our ongoing work to improve key ﬁnancial controls and procedures
impact of volcanic ash
included in separately disclosed items for the prior year were the incremental direct costs incurred by the group in respect of welfare costs to 
look after the customers who were affected by the closure of european airspace in april 2010 these costs principally included hotel costs for 
stranded inbound and outbound customers and the cost of repatriation of inbound customers which amounted to £69m in the current year 
there has been a release of £7m of accruals as costs in relation to the disruption in 2010 have been ﬁnalised with third party suppliers
separately disclosed ﬁnancial expenses
the separately disclosed ﬁnancial expenses in the year ended 30 september 2011 relate to £7m interest charges on the late settlement of tax 
liabilities in spain offset by the ﬁrst time recognition of £7m interest receivable on loan notes owed to the group by the airline group limited 
the separately disclosed ﬁnancial expenses in the year ended 30 september 2010 related to nondebt items principally a £3m interest charge 
on a tax penalty imposed by the turkish authorities relating to ﬁnancial years up to and including 2008
5 net ﬁnancial expenses
       year ended year ended
       30 september 30 september
       2011 2010
       £m £m
financial income
bank interest receivable       10 3
interest on pension scheme assets       73 66
total       83 69
financial expenses
bank interest payable on loans and overdrafts       11 10
finance charges on convertible bond       62 44
interest on pension scheme liabilities       84 84
interest payable in respect of loans from parent       4 15
finance lease charges       10 11
unwinding of discount on provisions       11 11
other ﬁnancial expenses       12 11
total       194 186
net ﬁnancial expenses       111 117
       year ended year ended
       30 september 30 september
       2011 2010
       £m £m
net ﬁnancial expense as above       111 117
less separately disclosed ﬁnancial expenses note 4      – 7
net underlying ﬁnancial expenses       111 110
4 separately disclosed items
        restated
       year ended year ended
       30 september 30 september
       2011 2010
       £m £m
merger related integration costs       – 116
restructuring and other separately disclosed items      74 63
aircraft and other assets       – 7
items relating to the prior year       7 –
total prevolcanic ash       81 186
incremental costs caused by volcanic ash disruption      7 69
total       74 255
separately disclosed ﬁnancial expenses       – 7
separately disclosed items within operating proﬁt are included within the consolidated income statement as follows
        restated
       year ended year ended
       30 september 30 september
       2011 2010
       £m £m
cost of sales       6 133
administrative expenses       80 122
total       74 255
merger related integration costs
the merger related integration programme has now been completed and no further costs are expected to arise in this category
in 2010 these related primarily to the costs of integration of the uk businesses the majority of costs £48m arose from the integration of  
first choice and thomson in the uk and in particular from the formation of one airline and an integrated retail estate a combined mainstream 
uk head ofﬁce was established in luton in 2010 and the uk business completed the creation of a single management information suite the 
improved management information and forecast capability which it gave the business led to the closing out of certain foreign currency positions 
based on the improved visibility of past and future requirements resulting in a £20m charge in that year
in 2010 costs also arose from the ongoing merger of former tui businesses based in continental europe with their first choice counterparts 
£4m in the accommodation  destinations sector separate first choice and tui tourism incoming agencies were combined in a number of 
key destinations notably spain the dominican republic greece and turkey total £16m
2010 costs also included amounts paid or provided for redundancy and integration remuneration costs property closures and onerous lease 
obligations as well as professional fees relating to the integration project
restructuring and other separately disclosed items
as previously reported during the sixmonth period ended 31 march 2011 the company engaged in a consultation process with the members  
of its deﬁned beneﬁt pension schemes which resulted in a restriction to salary increases used under the rules of the pension schemes to 
calculate beneﬁts to a maximum of 25 in any one year this change resulted in a reduction in accrued pension liabilities measured under ias 
19 of £63m which under ias 19 is recognised fully in the income statement in the period in which it occurs therefore a £63m credit is included 
in the consolidated income statement in relation to this curtailment which is included as a separately disclosed item
also included in the year ended 30 september 2011 are mainstream restructuring costs of £97m which principally relate to a substantial 
programme to reduce costs and improve efﬁciencies in the german business £32m the ongoing restructure of corsair the scheduled french 
airline and the retail network of nouvelles frontières in france £35m in total and further restructuring initiatives in the uk £19m including 
rationalising the retail distribution network in addition there has been £15m of restructuring costs incurred in the specialist  activity sector 
£8m in the accommodation  destinations sector and £16m of restructuring costs incurred in group head ofﬁce companies
costs incurred in the year ended 30 september 2010 included restructuring programmes which were not related to the business combination  
of first choice and the tourism businesses of tui ag the principal items were £43m to restructure corsair the scheduled french airline £22m 
for the restructuring of hotel operations in turkey and £13m to restructure the tour operator retail network and hotel operations of nouvelles 
frontières in france also included was a £30m credit arising from the revaluation of the investment in the airline group limited note 12 and 
a £13m gain recognised on the disposal of the canadian mainstream operation which was contributed when creating the strategic venture this 
gain was more than offset by our share of postdeal restructuring costs and related skyservice writeoffs
aircraft and other assets
during the year ended 30 september 2011 the principal charge is £12m in relation to a further impairment of the cruise ship the ‘island escape’ 
after its drydock costs were more expensive than previously anticipated and the assessment of the recoverable value of the ship through value in 
use has been reduced as a consequence of lower margins than anticipated being achieved in the current summer season this charge is completely 
offset by proﬁts on the sale and leaseback or disposal of aircraft and the disposal of aircraft engines previously held for sale
included in the year ended 30 september 2010 was a £47m credit relating to a combination of aircraft order cancellation credits and compensation 
for delays to the delivery of aircraft offset by a £12m impairment of the cruise ship ‘island escape‘ a £12m charge to provide for costs relating 
to the corsair ﬂeet renewal and a £7m onerous lease provision on an unused property financial statements
notes to the consolidated ﬁnancial statements continued
financial statements
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group at a glance strategic overview business and ﬁnancial review governance financial statements shareholder information
during the year there were major changes to uk deﬁned beneﬁt schemes with effect from april 2011 the schemes’ future beneﬁt accrual  
was amended as follows
1  the rate of increase in future pensionable salary was capped at 25 per annum for staff earning over £30000 per annum
2  normal retirement age was increased to age 65 where this was not already the case and the option to retire before normal retirement date 
without actuarial reduction where it existed was removed
3  future index linked increases are linked to the consumer price index cpi instead of the retail price index rpi
in addition some employee contribution rates were increased
on 17 may 2011 the group entered into an arrangement with the trustees of the britannia airways limited superannuation and life assurance 
scheme the tui pension scheme uk and the four schemes that subsequently merged to become the thomson airways pension scheme to 
address an element of the deﬁcit in the schemes
the group established a pension funding partnership pfp arrangement including tui travel amber scot lp the slp and tui travel amber 
ew llp llp together the partnerships the partnerships the main operating brands of the uk business namely thomson and first 
choice were transferred to the llp and the pension schemes subscribed for interests in the llp via the slp tui uk limited will pay a royalty 
to the llp for the use of the brands the britannia airways limited superannuation and life assurance scheme the tui pension scheme uk 
and the thomson airways pension scheme in aggregate are entitled to an annual income distribution of approximately £17m the pfp has a life 
of 15 years after which the schemes will receive a payment equal to their outstanding funding deﬁcit up to a maximum of £275m in aggregate 
in return for their interest in the pfp
the partnerships are controlled by the group and their results are consolidated by the group there is no net impact on the consolidated balance 
sheet the ias 19 deﬁcit or income statement the investment held by the pension schemes does not meet the deﬁnition of a scheme asset 
under ias 19 and is therefore not included within the fair value of scheme assets disclosed in the group ﬁnancial statements the recognition of  
the brand assets in the group ﬁnancial statements remains unaffected by the establishment of the pfp although the thomson and first choice 
brands the latter of which is recognised on the group balance sheet are now being held as security for the pfp  see note 10 for more information
subsequently with effect from 1 june 2011 the air 2000 limited retirement beneﬁts scheme the jetsave retirement beneﬁts plan and the 
orion airways pension and life assurance scheme all merged into the unijet group plc final salary scheme which was renamed the thomson 
airways pension scheme
 date of last full   average employee 
scheme name actuarial valuation average group contribution rate contribution rate
britannia airways limited superannuation  
and life assurance scheme 31 march 2010 54 plus £189m per annum deﬁcit contribution plus £119m pfp income 91
tui pension scheme uk 31 march 2010 76 plus £43m per annum deﬁcit contribution plus £41m pfp income 68
thomson airways pension scheme 31 march 2010 144 plus £19m per annum deﬁcit contribution plus £05m pfp income 99
there has not been a full valuation of the new scheme all four merged schemes had their previous valuations updated to 31 march 2010 to support the merger and the pfp arrangement and 
for the purposes of implementing a new recovery plan
where there is more than a single class of membership contribution rates reﬂect weighted average values within the scheme contribution rates 
are stated before adjustment for salary sacriﬁce arrangements where applicable
the principal unfunded schemes in germany are shown below these were all subject to a full actuarial valuation within three months preceding 
the balance sheet date
scheme name status
versorgungsordnung’ hapaglloyd fluggesellschaft gmbh open to new members
versorgungsordnung’ tui deutschland gmbh closed to new members
versorgungsordnung’ tui leisure travel gmbh closed to new members
valuations of the schemes are made by qualiﬁed actuaries using market based valuations for the assets and the projected unit method for the 
liabilities the group recognises all actuarial gains or losses in the consolidated statement of comprehensive income
6 employees
a average number of employees
the average monthly number of employees in the year in the group including directors on service contracts and key management was as follows
        restated
       year ended year ended
       30 september 30 september
       2011 2010
       number number
by sector
mainstream sector       39198 39063
specialist  activity sector       5686 5668
accommodation  destinations sector       8012 7100
emerging markets sector       5 –
corporate       346 359
total       53247 52190
the 2010 numbers have been reallocated so that they are aligned with the revisions to sector structure implemented in october 2010 there  
is no change to the total number of employees in this respect the 2010 numbers have also been restated to reﬂect the inclusion of magic life 
employees in line with the treatment adopted as set out in note 1bii
b employee costs
        restated
       year ended year ended
       30 september 30 september
       2011 2010
       £m £m
wages and salaries       1437 1402
social security costs       249 251
pension costs
– deﬁned beneﬁt pension scheme – curtailment gain disclosed in separately disclosed items    63 – 
– deﬁned beneﬁt pension scheme cost       33 37 
– deﬁned contribution pension scheme cost       25 24
sharebased payments note 6d       20 15
total       1701 1729
the curtailment gain of £63m in relation to the changes in the uk pension schemes described in note 6c together with £42m 2010 £96m 
of wages and salaries costs and £4m 2010 £8m of social security costs relating to redundancy and integration costs are included within 
separately disclosed items in note 4
c pension costs
the group operates pension schemes for employees eligible and wishing to participate in the schemes these comprise both deﬁned 
contribution and deﬁned beneﬁt schemes pension obligations vary reﬂecting the different legal and market conditions in each country of 
operation deﬁned contribution schemes are funded by the payment of contributions to private and staterun organisations whilst deﬁned 
beneﬁt schemes comprise both funded and unfunded schemes the assets of all the funded deﬁned beneﬁt schemes are held separately from 
the assets of the group
deﬁned contribution schemes for employees and directors
current contributions are recognised as an expense in the year and once paid the group has no further liability pension costs of £25m 2010 £24m 
relating to deﬁned contribution schemes were charged to the income statement
deﬁned beneﬁt pension schemes
the movement of deﬁned beneﬁt pension obligations and assets is detailed below summarised as uk germany and other other includes 
funded schemes in ireland the netherlands switzerland and norway whilst the main unfunded arrangements are in austria and france  
almost all uk schemes are funded whilst german schemes are unfunded
the principal funded schemes in the uk are shown in the table below these are closed to new members with the exception of existing 
employees working towards their entry qualiﬁcation date financial statements
notes to the consolidated ﬁnancial statements continued
financial statements
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group at a glance strategic overview business and ﬁnancial review governance financial statements shareholder information
the expected rates of return on each category of assets in each territory are as follows
  uk germany other
    
   2011 2010  2011  2010  2011  2010
         
equities   78 78 na na 79 80
government debt   38 38 na na 43 42
corporate bonds   53 53 na na 47 43
property   58 65 na na 48 64
cash and cash equivalents   05 05 na na 08 26
other   74 74 na na 26 25
overall expected rate of return   62 63 na na 48 50
the overall expected rate of return is calculated by weighting the individual rates in accordance with the anticipated balance in the schemes’ 
investment portfolio the fair values of the schemes’ assets are not intended to be realised in the short term and may be subject to signiﬁcant 
change before they are realised
changes in the fair value of scheme assets in each territory are as follows
 uk germany other total
    
 2011 2010 2011 2010 2011 2010 2011 2010
 £m  £m £m  £m £m  £m £m  £m
balance at beginning of year 1073 942 – – 142 137 1215 1079
expected return on scheme assets 67 60 – – 6 6 73 66
company contributions 50 89 – – 5 5 55 94
member contributions 3 4 – – 2 2 5 6
beneﬁts paid 62 61 – – 5 5 67 66
experience gainslosses 54 39 – – 8 – 62 39
foreign exchange – – – – 3 3 3 3
balance at end of year 1077 1073 – – 145 142 1222 1215
actual return on scheme assets 13 99 – – 2 6 11 105
employer contributions in the following year are expected to be £55m in respect of the uk and £4m in respect of other the uk value includes 
£17m in respect of income distribution from the pfp
the composition of the fair value of scheme assets in each territory is as follows
 uk germany other total
    
 2011 2010 2011 2010 2011 2010 2011 2010
 £m  £m £m  £m £m  £m £m  £m
schemes with surplus of assets – 2 – – 9 9 9 11
schemes with deﬁcit of assets 1077 1071 – – 136 133 1213 1204
total 1077 1073 – – 145 142 1222 1215
changes in the present value of deﬁned beneﬁt obligations in each territory are as follows
 uk germany other total
    
 2011 2010 2011 2010 2011 2010 2011 2010
 £m  £m £m  £m £m  £m £m  £m
balance at beginning of year 1422 1327 117 97 170 156 1709 1580
current service cost 19 26 8 7 6 4 33 37
interest cost on obligation 73 72 5 5 6 7 84 84
beneﬁts paid 62 61 2 2 5 7 69 70
member contributions 3 4 – – 2 2 5 6
curtailment 63 – – – 1 – 64 –
experience losses 44 54 6 16 11 11 27 81
reclassiﬁcation – – 8 – – – 8 –
foreign exchange – – 1 6 4 3 3 9
balance at end of year 1436 1422 129 117 171 170 1736 1709
the reclassiﬁcation relates to a cabin crew plan at tuifly previously classiﬁed along with more material amounts as a termination beneﬁt within 
other provisions the termination beneﬁts have been extinguished leaving the residual pension element which has therefore been reclassiﬁed
6 employees continued
the assets of each scheme have been taken at market value and liabilities in each territory have been calculated using the following principal 
assumptions
  uk
1
 per annum germany per annum other
3
 per annum
    
   2011 2010  2011  2010 2011 2010
           
inﬂation   32 32 25 16 21 18
pensionable salary inﬂation   26
2
 42
2
 25 25 28 28
discount rate   53 53 48 43 41 39
1  pension increases in payment across the uk schemes reﬂect either ﬁxed increases or index linked increases subject to minimum and maximum limits applicable to each class of beneﬁt
2  uk pensionable salary increase is capped at 25 for all staff earning over £30000 in the prior year 42 was applicable across all uk schemes with the exception of the britannia airways 
limited superannuation and life assurance scheme which had assumed salary inﬂation of 37 plus 14 to reﬂect annual service increments
3 the assumptions for other are a weighted average
the mortality assumptions underlying the value of the accrued liabilities for each territory are set out in the tables below the mortality 
assumptions are based on relevant standard mortality tables in each territory
uk life expectancy weighted average
       2011 2010
       years years
males
life expectancy in years for a pensioner retiring aged 65 on the balance sheet date    231 230
life expectancy in years for a pensioner retiring aged 65 20 years after the balance sheet date   242 243
females
life expectancy in years for a pensioner retiring aged 65 on the balance sheet date    255 254
life expectancy in years for a pensioner retiring aged 65 20 years after the balance sheet date   264 265
germany life expectancy
       2011 2010
       years years
males
life expectancy in years for a pensioner retiring aged 65 on the balance sheet date    185 183
life expectancy in years for a pensioner retiring aged 65 20 years after the balance sheet date   212 214
females
life expectancy in years for a pensioner retiring aged 65 on the balance sheet date    226 220
life expectancy in years for a pensioner retiring aged 65 20 years after the balance sheet date   251 250
other life expectancy weighted average
       2011 2010
       years years
males
life expectancy in years for a pensioner retiring aged 65 on the balance sheet date    207 205
life expectancy in years for a pensioner retiring aged 65 20 years after the balance sheet date   217 219
females
life expectancy in years for a pensioner retiring aged 65 on the balance sheet date    233 229
life expectancy in years for a pensioner retiring aged 65 20 years after the balance sheet date   237 236
the fair value of assets of the schemes in each territory are set out below
 uk germany other total
    
 2011 2010 2011 2010 2011 2010 2011 2010
 £m £m £m £m £m £m £m £m
equities 524 523 – – 46 47 570 570
government debt 229 242 – – 55 37 284 279
corporate bonds 196 177 – – 1 21 197 198
property 15 12 – – 1 1 16 13
cash and cash equivalents 10 20 – – 10 1 20 21
other 103 99 – – 32 35 135 134
total 1077 1073 – – 145 142 1222 1215 financial statements
notes to the consolidated ﬁnancial statements continued
financial statements
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group at a glance strategic overview business and ﬁnancial review governance financial statements shareholder information
other
    2011 2010 2009 2008  2007
other balance sheet    £m £m £m £m £m
fair value of scheme assets    145 142 137 114 103
present value of scheme liabilities    171 170 156 113 97
deﬁcitsurplus    26 28 19 1 6
    2011 2010 2009 2008  2007
other experience adjustments    £m £m £m £m £m
experience loss on scheme assets    8 – 3 15 1
experience gainloss on scheme liabilities    11 11 20 5 14
total
    2011 2010 2009 2008  2007
all territories’ balance sheet    £m £m £m £m £m
fair value of scheme assets    1222 1215 1079 924 994
present value of scheme liabilities    1736 1709 1580 1178 1289
deﬁcit    514 494 501 254 295
    2011 2010 2009 2008  2007
all territories’ experience adjustments    £m £m £m £m £m
experience lossgain on scheme assets    62 39 34 193 8
experience lossgain on scheme liabilities    27 81 305 197 120
reconciliation of deﬁned beneﬁt obligations and scheme assets to values recognised in the balance sheet
 uk germany other total
    
 2011 2010 2011 2010 2011 2010 2011 2010
 £m  £m £m  £m £m  £m £m  £m
present value of unfunded  
deﬁned beneﬁt obligations 1 1 129 117 18 18 148 136
present value of funded  
deﬁned beneﬁt obligations 1435 1421 – – 153 152 1588 1573
fair value of scheme assets 1077 1073 – – 145 142 1222 1215
 359 349 129 117 26 28 514 494
unrecognised past service cost – – – – 1 1 1 1
recognised liability for  
deﬁned beneﬁt obligation 359 349 129 117 25 27 513 493
analysed as
retirement beneﬁt noncurrent assets – – – – 1 1 1 1
retirement beneﬁt current liabilities – – 2 3 1 2 3 5
retirement beneﬁt noncurrent  
liabilities 359 349 127 114 25 26 511 489
total 359 349 129 117 25 27 513 493
the sensitivity of the fair value of the deﬁned pension deﬁcit to the key ﬁnancial and demographic assumptions is illustrated below
     uk germany other total
     2011 2011 2011 2011
     £m £m £m £m
decrease to deﬁcit of increasing discount rate by 025    63 5 6 74
increase to deﬁcit of reducing discount rate by 025    67 6 6 79
increase to deﬁcit of increasing all life expectancies by 1 year    37 3 3 43
6 employees continued
the amounts recognised in the consolidated income statement for the years ended 30 september 2011 and 30 september 2010 for each 
territory are as follows
 uk germany other total
    
 2011 2010 2011 2010 2011 2010 2011 2010
 £m  £m £m  £m £m  £m £m  £m 
current service cost 19 26 8 7 6 4 33 37
curtailment 63 – – – 1 – 64 –
interest on deﬁned beneﬁt  
pension scheme obligation 73 72 5 5 6 7 84 84
expected return on deﬁned  
beneﬁt pension scheme 67 60 – – 6 6 73 66
total 38 38 13 12 5 5 20 55
the uk curtailment gain reﬂects the future growth in pensionable salary being capped at 25 per annum for employees earning more than 
£30000 per annum
these amounts are included within the following expenseincome categories in the consolidated income statement
 uk germany other total
    
 2011 2010 2011 2010 2011 2010 2011 2010
 £m  £m £m  £m £m  £m £m  £m
cost of sales 33 14 7 6 2 2 24 22
administrative expenses 11 12 1 1 3 2 7 15
financial expenses 73 72 5 5 6 7 84 84
financial income 67 60 – – 6 6 73 66
total 38 38 13 12 5 5 20 55
the amounts recognised directly in equity for the year ended 30 september 2011 and for the year ended 30 september 2010 for each territory 
are as follows
 uk germany other total
    
 2011 2010 2011 2010 2011 2010 2011 2010
 £m  £m £m  £m £m  £m £m  £m
cumulative losses brought forward 454 439 20 5 34 24 508 468
lossesgains recognised  
during the year 98 15 6 16 3 11 89 42
foreign exchange – – 1 1 – 1 1 2
cumulative losses carried forward 552 454 13 20 31 34 596 508
trend analysis information in respect of the uk germany and other territories is as follows
uk
    2011 2010 2009 2008  2007
uk balance sheet    £m £m £m £m £m
fair value of scheme assets    1077 1073 942 810 891
present value of scheme liabilities    1436 1422 1327 1015 1144
deﬁcit    359 349 385 205 253
    2011 2010 2009 2008  2007
uk experience adjustments    £m £m £m £m £m
experience lossgain on scheme assets    54 39 37 178 7
experience lossgain on scheme liabilities    44 54 272 184 95
germany
    2011 2010 2009 2008  2007
germany balance sheet    £m £m £m £m £m
fair value of scheme assets    – – – – –
present value of scheme liabilities    129 117 97 50 48
deﬁcit    129 117 97 50 48
    2011 2010 2009 2008  2007
germany experience adjustments    £m £m £m £m £m
experience gainloss on scheme liabilities    6 16 13 8 11 financial statements
notes to the consolidated ﬁnancial statements continued
financial statements
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group at a glance strategic overview business and ﬁnancial review governance financial statements shareholder information
employee expenses for the year
employee expenses for the current and prior year relating to sharebased schemes are
       year ended year ended
       30 september 30 september
       2011 2010
       £m £m
equitysettled       19 14
expense arising for share appreciation rights       1 1
total       20 15
of the £20m 2010 £15m total employee expenses relating to sharebased schemes incurred in the year ended 30 september 2011 £nil  
2010 £4m is included within separately disclosed items note 4 as relating to speciﬁc remuneration incurred for postmerger integration
share appreciation rights
certain participants other than board directors are eligible to receive their awards on a cashsettled basis the calculation of which exactly 
replicates the formal sharebased scheme
long term incentives
deferred annual bonus longterm incentive scheme
the deferred annual bonus longterm incentive scheme dablis is for participants below the gmb level and requires a 25 deferral of any 
annual performance bonus award into shares matching shares may also be awarded up to four times the deferred amount and are subject to 
the achievement of stretching performance conditions over a threeyear period awards of deferred and matching shares are subject to forfeiture 
conditions until the release date the earliest point at which the shares are eligible for release is at the end of three years following deferral
for awards of matching shares made during the year no shares will vest unless the annual average of the ratio of the group’s return on invested 
capital roic to the weighted average cost of capital wacc meets or exceeds one over the threeyear period a hurdle of roic being at least 
equal to wacc is used to ensure that the relevant long term incentive awards pay out only when shareholder value is being created over the 
performance periods if the roicwacc hurdle is met shares will only vest to the extent to which two further performance conditions are 
satisﬁed over the threeyear period as follows
• up to half the matching shares will vest based on growth in roic within the participants’ sector or group over the three year performance period
roic performance gap proportion of matching shares vesting
below the minimum 0
minimum level achieved on a straight line basis between 10 and 100
maximum level achieved 100
• up to one quarter of the matching shares will vest based on growth in the group’s earnings per share eps before amortisation of merger 
intangibles goodwill impairment and separately disclosed items in relation to the growth in the uk retail price index rpi as shown in the 
table below
average annual eps growth in excess of rpi growth proportion of matching shares vesting
below 4 0
between 4 and 13 on a straight line basis between 10 and 100
13 or above 100
• up to one quarter of the matching shares will vest based on the group’s ranking of total shareholder return tsr performance relative to 
companies ranked 30th to 100th by market capitalisation on the london stock exchange as at the date of the award as shown in the table below
tsr ranking proportion of matching shares vesting
below median 0
between median and upper quartile on a straight line basis between 15 and 100
at or above upper quartile 100
matching share awards lapse if the performance conditions are not met
e remuneration of directors
       year ended year ended
       30 september 30 september
       2011 2010
       £m £m
emoluments       8 9
pensions and other retirement beneﬁts       1 1
total       9 10
further information is provided in the audited section of the remuneration report
6 employees continued
d share award schemes
the company operates three principal share award schemes which are designed to link remuneration to the future performance of the group 
the schemes are the performance share plan psp the deferred annual bonus scheme dabs and the deferred annual bonus longterm 
incentive scheme dablis the dablis scheme is described below and the other three schemes are described in the remuneration report 
along with the relevant vesting criteria
at 30 september 2011 the shares allocated and outstanding in respect of ordinary shares were as follows
share award scheme number of shares date due to vest
performance share plan 1020602 28 november 2011
 5139613 28 november 2011
 1852876 2 december 2012
 712513 19 march 2013
 1988854 6 december 2013
deferred annual bonus scheme 3829912 28 november 2011
 3202607 2 december 2012
 3959768 6 december 2013
deferred annual bonus longterm incentive scheme 2171283 2 december 2012
 2468921 6 december 2013
total 26346949
the number of share awards at the beginning and end of the year is as follows
       number of awards 
       30 september
        2011
outstanding at beginning of the year – excluding deferred shares      29575371
forfeited during the year        6401065
exercised during the year        5346542
granted during the year        8519185
outstanding at the end of the year – excluding deferred and delayed shares     26346949
in addition to the above shares there are 1310340 2010 423096 deferred shares outstanding in relation to the dabs these are due to vest 
between 28 november 2011 and 6 december 2013
in respect of the dablis there are an additional 2176746 2010 1155478 deferred shares these are due to vest between 2 december 2012 
and 6 december 2013 although participants have opted to delay vesting in respect of 71205 shares
the weighted average share price of the shares exercised was £242
no material awards have been made to date under the group’s hmrc approved share incentive plan which is an allemployee share plan
the fair value of services received in return for shares awarded during the year is measured by reference to the fair value of the shares awarded 
the fair value at the date the shares were awarded has been estimated using a binomial methodology for all schemes except where there is a 
market based performance condition attached to vesting in which case a monte carlo simulation was used the principal assumptions required 
by these methodologies were
       2011 2010
information relating to fair values of shares awarded
fair value at measurement date       £150£194 £130£258
share price       £229 £243£293
expected volatility       561 440
award life       3 years 3 years
expected dividends       556 36
risk free interest rate       10 16
participants are not entitled to dividends prior to vesting expected volatility is based on historic volatility adjusted for changes to future volatility 
indicated by publicly available information shares were awarded under a service condition financial statements
notes to the consolidated ﬁnancial statements continued
financial statements
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group at a glance strategic overview business and ﬁnancial review governance financial statements shareholder information
8 taxation
the tax charge can be summarised as follows
i analysis of chargecredit in the year
       year ended year ended
       30 september 30 september
       2011 2010
       £m £m
current tax charge
uk corporation tax on proﬁtloss for the year       24 –
nonuk tax on proﬁtloss for the year       50 61
adjustments in respect of previous years       3 15
       71 46
deferred tax creditcharge
origination and reversal of timing differences
current year uk       40 6
current year nonuk       41 2
changes in tax rates       14 1
adjustments in respect of previous years       29 13
       14 4
total income tax charge in consolidated income statement      57 50
ii reconciliation of effective tax rate
the total tax charge 2010 charge for the year is higher 2010 higher than the standard rate of corporation tax in the uk of 27 2010 28 
the differences are explained below
   year ended year ended
   30 september 2011 30 september 2010
    
     £m  £m 
proﬁtloss before tax reported in the consolidated income statement   144  36
less share of proﬁtloss in joint ventures and associates note 12   13  3
     131  33
income tax on proﬁtloss before tax excluding share of proﬁt of joint  
ventures and associates at the standard rate of uk tax of 27 2010 28   35 27 9 28
expenses not deductible for tax purposes     29 22 3 9
income not taxable     14 11 2 6
tax losses not recognised as an asset     64 49 67 203
utilisation of tax losses not previously recognised    30 23 – –
higher tax rates on overseas earningslosses     3 2 3 9
lower tax rates on overseas earningslosses     – – 3 9
changes in tax rates     8 6 1 3
adjustments to taxation in respect of previous periods    32 24 2 6
total income tax charge in income statement     57 44 50 151
the underlying effective rate of taxation for the year ended 30 september 2011 is calculated based on the underlying proﬁt before tax 
excluding separately disclosed items acquisition related expenses and goodwill impairment charges and is calculated at 27 the actual tax 
rate of 44 differs from the underlying effective tax rate due to the tax effect of separately disclosed items principally the nonrecognition  
of tax losses arising from such items acquisition related expenses goodwill impairment charges and the booking of £17m of speciﬁc provisions 
against potential tax exposures in morocco and the uk
iii deferred tax recognised outside of the consolidated income statement
the following taxation charge has been recognised outside of the consolidated income statement
       year ended year ended
       30 september 30 september
       2011 2010
       £m £m
tax relating to components of other comprehensive income
cash ﬂow hedges       22 9
deﬁned beneﬁt pension plans       3 9
other       4 9
total tax debited to other comprehensive income      29 9
tax crediteddebited directly to equity
equitysettled transactions sharebased payments      – 4
convertible bonds       2 31
total tax crediteddebited to equity       2 27
total       27 36
7 income expenses and auditors’ remuneration
included within operating proﬁt in the consolidated income statement for the year are the following creditscharges
        restated
       year ended year ended
       30 september 30 september
       2011 2010
       £m £m
operating lease income
– aircraft       54 54
– land and buildings       4 4
operating lease rentals
– land and buildings       198 180
– aircraft and other equipment       460 423
depreciation of property plant and equipment       137 171
amortisation of intangible assets
– business combination intangibles       66 54
– other intangibles       35 40
charge for sharebased payments       20 15
loss on sale of property plant and equipment       6 1
loss on foreign currency retranslation       38 18
impairment of goodwill and other intangibles       51 12
impairment of property plant and equipment       18 15
operating lease rentals land and buildings includes £12m 2010 £15m of costs included in separately disclosed items note 4 as provisions for 
onerous leases primarily related to vacated properties in the uk and ireland in addition to the operating lease rentals disclosed above charges 
of £184m 2010 £149m were incurred in respect of hotel accommodation rentals which are disclosed as operating leases under ifric 4 
determining whether an arrangement contains a lease
up to 20 aircraft are ‘wet leased’ exclusively to another european airline company at ﬁxed rates the expected income from future minimum 
lease payments under noncancellable operating leases being leased to others is as follows
       year ended year ended
       30 september 30 september
       2011 2010
       £m £m
minimum lease payments under noncancellable operating leases expiring
within one year       36 40
between one and ﬁve years       142 142
later than ﬁve years       108 144
total       286 326
services provided by the company’s auditors and its associates
during the year the group including its overseas subsidiaries obtained the following services from the company’s auditor and its associates
        restated
       year ended year ended
       30 september 30 september
       2011 2010
       £m £m
fees payable to the company’s auditors for the audit of the parent company and consolidated ﬁnancial statements  1 1
fees payable to the company’s auditors and its associates for other services
audit of the company’s subsidiaries pursuant to legislation      3 4
auditors‘ remuneration for audit services       4 5
other services provided to comply with legislation including regulatory reporting    1 1
all other services       2 3
the 2011 audit fees refer to fees paid to pricewaterhousecoopers llp who are now the auditors for the group
the 2010 auditors’ fees have been restated so as to include fees paid to both the group’s then auditors kpmg audit plc and its associates and 
also fees paid to pricewaterhousecoopers llp who were then auditors of certain subsidiaries of the group this has been done to make the two 
sets of ﬁgures directly comparable financial statements
notes to the consolidated ﬁnancial statements continued
financial statements
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10 intangible assets
   customer computer  software in
 goodwill brands relationships software licenses development other total
 £m £m £m £m £m £m £m £m
cost
at 1 october 2009 as previously reported 4530 441 211 395 42 29 137 5785
restatement 2 – – – – – – 2
at 1 october 2009 restated 4532 441 211 395 42 29 137 5787
additions 1 – – 27 1 14 1 44
acquisition through business combinations 31 13 1 – – – 27 72
disposals 6 – – 18 2 – – 26
reclassiﬁcation from assets held for sale – – – – 2 – – 2
foreign exchange 80 7 12 2 2 1 2 106
reclassiﬁcation of asset class – – – 20 5 15 – –
at 30 september 2010 4478 447 200 422 36 27 163 5773
at 1 october 2010  
as previously reported 4476 447 200 422 36 27 163 5771
restatement 2 – – – – – – 2
at 1 october 2010 restated 4478 447 200 422 36 27 163 5773
additions – – 1 47 1 3 1 53
acquisition through business  
combinations 57 9 – 2 – – 7 75
disposals 18 – – 24 2 – – 44
reclassiﬁcation from assets  
held for sale 11 – – 1 – – – 12
foreign exchange 20 3 2 2 1 – – 28
reclassiﬁcation of asset class 1 – 2 1 1 – 3 –
at 30 september 2011 4549 459 205 449 37 30 168 5897
amortisation and impairment losses
at 1 october 2009 as previously reported 603 48 35 278 19 – 65 1048
restatement 2 – – – – – – 2
at 1 october 2009 restated 605 48 35 278 19 – 65 1050
amortisation for the year – 25 13 47 2 – 7 94
impairment loss 12 – – – – – – 12
disposals – – – 16 2 – – 18
reclassiﬁcation from assets held for sale – – – – 1 – – 1
foreign exchange 20 1 3 2 – – 1 25
reclassiﬁcation of asset class – – – 5 5 – – –
at 30 september 2010 597 72 45 312 15 – 73 1114
at 1 october 2010  
as previously reported 595 72 45 312 15 – 73 1112
restatement 2 – – – – – – 2
at 1 october 2010 restated 597 72 45 312 15 – 73 1114
amortisation for the year – 30 14 47 1 – 9 101
impairment loss 39 6 1 – 1 4 – 51
disposals – – – 24 1 – – 25
reclassiﬁcation from assets  
held for sale 8 – – – – – – 8
foreign exchange 2 1 1 1 – 1 – 6
at 30 september 2011 646 109 61 336 16 5 82 1255
net book value
at 1 october 2009 3927 393 176 117 23 29 72 4737
at 30 september 2010 3881 375 155 110 21 27 90 4659
at 30 september 2011 3903 350 144 113 21 25 86 4642
8 taxation continued
iv factors affecting future tax charge
a on 22 june 2010 the uk government announced a phased reduction in the main uk corporation tax rate from 28 to 24 with the ﬁrst  
1 reduction taking effect from 1 april 2011 having been substantively enacted on 20 july 2010 the march 2011 uk budget statement 
announced an additional 1 reduction in the main uk corporation tax rate to 26 taking effect from 1 april 2011
at the balance sheet date the second 1 reduction has been substantively enacted conﬁrming that the main uk corporation tax rate will be 
25 from 1 april 2012 therefore at 30 september 2011 deferred tax assets and liabilities have been calculated based on a rate of 25 where 
the temporary difference is expected to reverse after 1 april 2012
the remaining proposed reductions of the main rate of corporation tax by 1 per year to 23 by 1 april 2014 are expected to be enacted 
separately each year these further changes had not been substantively enacted at the balance sheet date and are therefore not included  
in these ﬁnancial statements
this may reduce the group’s future current tax charge accordingly it has not yet been possible to quantify the full anticipated effect of the 
announced further 2 rate reduction although this should further reduce the group’s future current tax charge and reduce the group’s 
deferred tax liabilitiesassets accordingly
b the spanish tax authorities are auditing parts of the group’s spanish operations for the years 2002 through 2006 during 2010 the spanish 
tax authorities formally notiﬁed the group that they disagreed with the spanish corporate income tax treatment of two separate transactions 
that were undertaken during the period under audit the group has had extensive discussions with the spanish tax authorities to explain the 
nature of the transactions and seek to agree the spanish tax treatment of these
the original tax deduction arising from the transactions being challenged by the spanish tax authorities was approximately €28m in prior years 
the directors recorded a tax creditor for their best estimate of the tax that they believe may become payable in the event that the spanish tax 
authorities are successful in their challenge this creditor continues to be held at 30 september 2011 within income taxes payable in continuing 
to challenge these transactions the tax authorities may seek to pursue a judicial process with the possibility of interest and penalties the 
outcome of which at this stage is not certain on the basis of independent legal advice taken the group ﬁrmly believes that in the event of any 
such case it could be defended robustly it is likely that the resolution of this matter will take a number of years to reach a ﬁnal conclusion
c other factors which may affect the future tax charge include the mix of jurisdictions with different tax rates in which proﬁts and losses arise 
changes in tax rates and the potential future recognition of tax losses for which a deferred tax asset has not been recognised at the year end 
note 14
9 dividends
the following dividends which relate to ordinary shares have been deducted from equity in the year
       year ended year ended
       30 september 30 september
      pence 2011 2010
      per share £m £m
dividends relating to the year ended 30 september 2009
interim dividend paid october 2009      30 – 33
final dividend paid april 2010      77 – 85
      107 – 118
dividends relating to the year ended 30 september 2010
interim dividend paid october 2010      32 36 –
final dividend paid april 2011      78 86 –
      110 122 –
the interim dividend in respect of the year ended 30 september 2011 of 33p per share was paid on 3 october 2011 and this dividend of £36m 
will be recognised as a deduction from equity in the year ending 30 september 2012
subsequent to the balance sheet date the directors have proposed a ﬁnal dividend of 80p per share 2010 ﬁnal dividend of 78p per share 
payable on 10 april 2012 to the holders of relevant shares on the register at 9 march 2012 the ﬁnal proposed dividend amounts to £125m and 
will after approval by shareholders be recognised in the consolidated ﬁnancial statements for the year ending 30 september 2012 the ﬁnal 
ordinary dividend of 80p per share together with the interim dividend of 33p per share makes a total dividend of 113p per share relating to 
the year ended 30 september 2011
a dividend reinvestment plan is in operation those shareholders who have not elected to participate in this plan and who would like to 
participate with respect to the 2011 ﬁnal dividend may do so by contacting equiniti directly on 0871 384 2030 or via the overseas helpline on 
44 121 415 7047 the last day for election for the ﬁnal proposed dividend is 23 march 2012 and any requests should be made in good time 
ahead of that date financial statements
notes to the consolidated ﬁnancial statements continued
financial statements
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the calculation of recoverable value for cgus based on value in use includes the following assumptions
• cash ﬂow projections based on the group’s latest approved ﬁveyear business plan
• cash ﬂows beyond the plan period are extrapolated using an inﬂation only growth rate of between 125 and 4 the growth rate used is 
less than or equal to third party estimates of the medium term gdp growth rates of the key geographic markets in which the speciﬁc cgu 
operates at the time the projections are prepared
• cash ﬂows are discounted using the group’s wacc adjusted as appropriate for business speciﬁc factors such as geographic risk
• cash ﬂows exclude planned enhancement capital expenditure together with the associated beneﬁt that the expenditure is expected to produce
• cash ﬂows include the impact of working capital in both the asset base and the impact on cash ﬂows over the plan period
• central group overheads are borne in full by cgus and are allocated pro rata to the cgu’s underlying operating proﬁt
the calculation of recoverable value for cgus based on fair value less costs to sell includes the following assumptions
• cash ﬂow projections based on the group’s latest approved ﬁveyear business plan incorporating adjustments to fair value where appropriate
• cash ﬂows beyond the plan period are extrapolated using an inﬂation only growth rate of 2
• cash ﬂows are discounted using the group’s wacc adjusted as appropriate for speciﬁc factors relevant to that cgu such as geographic risk
• central group overheads are borne in full by cgus and are allocated pro rata to the cgus’ underlying operating proﬁt
other key assumptions are in respect of the short and medium term postacquisition earnings of acquired operations the forecast earnings  
of these newlyacquired businesses are inherently more judgmental over these time frames
assumptions used in the ﬁveyear plan take past experience into account with cgu speciﬁc and central contingencies being allocated into  
the ﬁveyear plan ﬁgures for all cgus the higher cgu speciﬁc wacc rates in 2010 are a result of the budgeted central contingency not being 
allocated to speciﬁc cgus but instead an additional speciﬁc risk factor was applied to each cgu’s wacc for 2011 the central contingency has 
been allocated to individual cgus and hence the individual cgu speciﬁc waccs do not require an additional speciﬁc risk factor to be applied 
exceptional events in the magnitude of the volcanic ash and related closure of airspace in 2010 are not expected to occur again and are not built 
into the plan whilst the full impact of the 2011 arab spring could not be built into the previous years’ ﬁveyear plans the current ﬁveyear plan 
used for this impairment test does reﬂect the current and expected weaker demand in the near future relative to previous ﬁveyear plans
since determination of an appropriate group wacc is judgmental sensitivities also address how increases in the base group wacc might 
impact the results of the impairment tests the group’s wacc is based on a capital asset pricing model calculation using a mixture of inhouse 
data and externally available information
an analysis of the aggregate and material carrying amounts of goodwill allocated to each principal cgu together with the growth rates being 
applied to cash ﬂows beyond the plan period and the pretax discount rates used for each cgu or group of similar cgus is as follows
   growth rate applied to
  goodwill cash ﬂows after ﬁveyear plan pretax discount rate used
    
  30 september 30 september   30 september 30 september
  2011 2010 2011 2010 2011 2010
sector cgu £m £m    
mainstream – northern region uk  ireland  1495 1514 2 15 10 11
mainstream – central europe germany  409 387 2 2 11 11
accommodation  destinations  accommodation   
destinations b2b  398 322 2 3 11 13
mainstream – northern region nordics  276 273 2 2 10 11
mainstream – western europe france  205 228 2 15 11 11
accommodation  destinations  accommodation   
destinations b2c  234 218 225 3 10 13
accommodation  destinations  accommodation   
destinations specialist  102 159 2 3 11 13
specialist  activity student  134 143 2 15 10 12
all sectors multiple cgus  759 729 1254 113 1013 1114
total goodwill   4012 3973
of which
goodwill included within intangible assets 3903 3881
goodwill included in assets held for sale note 18 – 3
goodwill included within joint ventures and associates note 12 109 89
   4012 3973
goodwill included in assets held for sale at 30 september 2010 of £3m relates to jet4you and has been represented in the current year  
within intangible assets see note 10 the multiple cgus not separately listed above do not individually represent more than 3 of total  
group goodwill all of the group’s goodwill has been allocated to each cgu and all cgus have been tested for impairment
10 intangible assets continued
as part of the restatement for the impact of magic life the opening balances at 1 october 2009 for cost and accumulated amortisation have 
both been increased by £2m with no impact on net book value
disposals within goodwill of £18m represent reductions in the amounts of deferred and contingent consideration on acquisitions which took 
place in previous years
amortisation of intangible assets is recognised within cost of sales in the consolidated income statement
as disclosed above in note 6c the group established a pfp arrangement in the year the main operating brands of the uk business namely 
thomson and first choice were sold into the pfp and three uk pension schemes subscribed for interests in the pfp the recognition of the  
two brand assets in the group ﬁnancial statements remains unaffected by the establishment of the pfp  although the thomson and first choice 
brands the latter of which is recognised on the group balance sheet at a value of £108m are now being held as security for the pfp
amortisation of business combination and other intangibles combined with depreciation of property plant and equipment is disclosed by 
segment in note 3
individual intangible assets other than goodwill that are considered material to the group are as follows
  brands customer relationships  other intangible assets
    
   2011 2010 2011 2010 2011 2010
   £m £m £m £m £m £m
first choice brand   108 114 – – – –
marmara brand   32 34 – – – –
accommodation  destinations b2b – customer relationships – – 84 91 – –
landing slots   – – – – 32 34
   140 148 84 91 32 34
the first choice and marmara brands are major brands of the uk  ireland and french businesses respectively and have a remaining amortisation 
period of 16 years 2010 17 years the customer relationships within the accommodation  destinations b2b sector are in respect of 
commercial contractual relationships with travel agents and have a remaining amortisation period of 11 years 2010 12 years the landing  
slots are in respect of the uk  ireland business for airports in the uk and have a remaining amortisation period of 16 years 2010 17 years
intangible asset impairment charges other than goodwill
of the £12m 2010 £nil impairment charge to intangible assets other than goodwill in the year ended 30 september 2011 £11m 2010 £nil 
relates to the uk  ireland segment of which £6m relates to the impairment of brands 2010 £nil £4m 2010 £nil relates to the impairment 
of software in development and £1m 2010 £nil relates to the impairment of customer relationships
of the brand impairment £5m is in relation to the ‘island escape’ brand the recoverable amount of both the ‘island escape’ cruise ship and its 
related brand asset were calculated using the value in use basis derived from the cash ﬂow projections in the group’s latest approved ﬁveyear 
business plan discounted at the group’s wacc and adjusted as appropriate for business speciﬁc factors to give a posttax discount rate of 10 
the carrying value was impaired to the extent it was below recoverable value with the brand being fully impaired the remaining £1m of the 
brand impairment and the £1m impairment of customer relationships relates to the explorers travel group and these impairments have been 
charged because the group no longer uses these assets
an impairment charge of £4m was made to software in development in relation to the project to replace the uk  ireland business‘ core reservation 
and webselling platform these capitalised costs were impaired as they were not considered likely to deliver future economic beneﬁt following  
a change in direction of the project
a £1m 2010 £nil impairment charge has also been charged in respect of licences within the specialist  activity sector
goodwill impairment testing
ias 36 requires that impairment tests are carried out on cgus following the level at which the group’s management measures returns on operations
once every year or more frequently if events or a change in the economic environment indicate a risk of impairment the group assesses the 
recoverable amount of goodwill allocated to its cgus as required by ias 36 impairment of assets the recoverable value of goodwill for all cgus 
has been determined to be ‘value in use’ with the exception of the french cgu which is determined using the ‘fair value less costs to sell’ basis 
this fair value less costs to sell basis has been used as the board’s restructuring plan is not sufﬁciently advanced to meet the criteria for including 
both the costs and the associated beneﬁts of the plan in a value in use calculation and not as a result of any intention to dispose of this cgu financial statements
notes to the consolidated ﬁnancial statements continued
financial statements
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group at a glance strategic overview business and ﬁnancial review governance financial statements shareholder information
11 property plant and equipment
     advance
     payment
   yachts motor  for future
  land and boats and aircraft and delivery computer other
  buildings cruise ships equipment of aircraft equipment equipment total
  £m £m £m £m £m £m £m
cost
at 1 october 2009 as previously reported  339 241 967 108 168 495 2318
restatement note 1bii  – – – – 1 28 29
restated balance at 1 october 2009  339 241 967 108 169 523 2347
foreign exchange  10 2 40 5 1 15 71
acquisitions through business combinations  2 – – – – 3 5
additions  26 131 32 36 8 52 285
disposals  8 17 49 – 13 37 124
reclassiﬁcations  3 1 24 2 11 35 –
transferred from assets held for sale  2 – – – – – 2
at 30 september 2010  354 352 934 137 176 491 2444
at 1 october 2010 as previously reported  354 352 934 137 175 461 2413
restatement note 1bii  – – – – 1 30 31
restated balance at 1 october 2010  354 352 934 137 176 491 2444
foreign exchange  13 1 8 1 3 3 21
acquisitions through business combinations  1 – – – 2 3 6
transfer from inventory  – – 30 – – – 30
additions  20 60 28 73 14 72 267
disposals  8 7 229 39 1 51 335
reclassiﬁcations  3 14 10 – 1 28 –
transferred fromto assets held for sale  1 1 52 – – – 52
at 30 september 2011  384 419 729 170 195 484 2381
depreciation and impairment
at 1 october 2009  175 87 633 – 146 313 1354
restatement note 1bii  – – – – 1 17 18
restated balance at 1 october 2009  175 87 633 – 147 330 1372
foreign exchange  4 1 27 – 1 6 37
provided in the year  16 19 83 – 12 41 171
disposals  7 9 41 – 12 32 101
impairments  – 15 – – – – 15
reclassiﬁcations  2 – – – 7 9 –
transferred from assets held for sale  1 – – – – – 1
at 30 september 2010  183 111 648 – 155 324 1421
at 1 october 2010 as previously stated  183 111 648 – 154 305 1401
restatement note 1bii  – – – – 1 19 20
restated balance at 1 october 2010  183 111 648 – 155 324 1421
foreign exchange  3 – 4 – 3 1 9
acquisitions through business combinations  – – – – 2 2 4
transfer from inventory  – – 21 – – – 21
provided in the year  14 22 51 – 8 42 137
disposals  6 – 154 – – 27 187
impairments  2 12 4 – – – 18
reclassiﬁcations  3 7 – – – 10 –
transferred to assets held for sale  – – 43 – – – 43
at 30 september 2011  199 152 531 – 168 330 1380
net book value
at 1 october 2009 restated  164 154 334 108 22 193 975
at 30 september 2010 restated  171 241 286 137 21 167 1023
at 30 september 2011  185 267 198 170 27 154 1001
please refer to note 1bii for a full explanation of the restatement
10 intangible assets continued
goodwill impairment charges
if the recoverable amount of a cgu is estimated to be less than the total of its operating noncurrent assets goodwill and other intangibles  
an impairment loss is recognised immediately in the income statement the impairment loss is allocated ﬁrst to reduce the carrying amount of 
any goodwill allocated to the cgu and then to the other assets on a pro rata basis the impairment loss recognised is equal to the difference 
between the net book value and the recoverable amount
a £39m impairment charge has been recognised in respect of the french cgu being that of the french tour operator following the fair value 
less costs to sell basis key differences between the fair value less costs to sell and value in use calculations are the inclusion of the costs and 
beneﬁts of the group’s restructuring plan for france and the exclusion of working capital balances in the fair value less costs to sell calculation 
the french tour operator cgu includes the tour operating brands of groupe nouvelle frontières marmara and aventuria the recognition of an 
impairment follows a deterioration in the trading results during the year of the french source market due to the political unrest in north africa 
this being a key destination for the french market the french tour operator cgu is included within the rest of western europe segment for  
the purposes of segmental reporting
in the year ended 30 september 2010 there was a £12m impairment of goodwill relating to the italian £7m and spanish £5m cgus as a result 
of a deterioration in forecast trading results compared to the prior year the impairment test for both of these cgus was based on the value in 
use calculation both impairment charges are disclosed within administrative expenses and shown separately on the face of the consolidated 
income statement
the impairment arose since the cash ﬂow model based on the then current ﬁveyear plan and other criteria described above did not support  
the carrying amount of goodwill and all other assets for these two cgus the pretax discount rate used for these two businesses was 11  
for italy and 12 for spain and the growth rates beyond the ﬁveyear plan used were 12 for the italian cgu and 19 for the spanish cgu
sensitivity analysis for goodwill
the calculation of recoverable amount is for the current year sensitive to forecast future earnings and particularly the discount rates used  
the directors have considered the separate impacts of i increasing wacc by 05 ii a reduction in underlying earnings of 5 across all years 
and iii a reduction in the long term percentage growth rate beyond the ﬁveyear plan to nil as being reasonably possible changes
    impact of a reasonably possible
    change in assumption
   
        reduction in
       reduction in  the long term
      increase in underlying percentage
      wacc of 05 earnings of 5 growth rate to nil
      £m £m £m
cgus where an impairment would arise following a reasonably possible change in assumption
italy – mainstream sector      2 1 3
spain – mainstream sector      3 3 1
      5 4 4
these sensitivities disclosed immediately above do not take account of any mitigating action that management would take should earnings decrease
no further impairments to goodwill would arise following a reasonably possible change in any of the above key assumptions in isolation except 
for the impairments referred to above and based on the calculations undertaken the directors consider that the recoverable amount of goodwill 
in each cgu exceeds its carrying value
in the year ended 30 september 2010 there was a £12m impairment of goodwill relating to the italian £7m and spanish £5m cgus as at  
30 september 2011 there remains no excess in the recoverable value over carrying value for these two cgus therefore any reasonably possible 
deterioration in an assumption will cause the recoverable value to be below the carrying value and therefore require an impairment as shown above financial statements
notes to the consolidated ﬁnancial statements continued
financial statements
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group at a glance strategic overview business and ﬁnancial review governance financial statements shareholder information
12 investment in joint ventures associates and other investments
the group’s equity investment in its joint ventures and associates is recorded in the consolidated ﬁnancial statements as follows
      share of net share of net total
      assets of assets of share of
      joint ventures associates net assets
      £m £m £m
cost
at 1 october 2009      57 19 76
share of proﬁtslosses before interest and tax for the year     8 3 5
share of amortisation for the year      – 2 2
share of interest and tax charge      5 1 6
acquisitions      1 58 59
disposals      – 1 1
dividends paid      7 2 9
reclassiﬁcations and other movements      5 4 1
foreign exchange      2 1 1
at 30 september 2010      57 65 122
share of lossesproﬁts before interest amortisation and tax for the year    1 23 22
share of interest and tax charge      4 – 4
share of amortisation for the year      – 3 3
acquisitions      4 1 5
dividends paid      2 5 7
reclassiﬁcations and other movements      1 – 1
foreign exchange      1 – 1
at 30 september 2011      52 81 133
goodwill
at 1 october 2009      20 16 36
acquisitions      10 47 57
reclassiﬁcations and other movements      – 1 1
foreign exchange      1 2 3
at 30 september 2010      29 60 89
acquisitions      19 1 20
reclassiﬁcations and other movements      1 – 1
foreign exchange      1 – 1
at 30 september 2011      48 61 109
cost and net book value
at 1 october 2009      77 35 112
at 30 september 2010      86 125 211
at 30 september 2011      100 142 242
the principal joint ventures and associates and the proportion of voting rights are shown below
   proportion of   country of 
name of company   voting rights held  nature of business  registrationincorporation
joint ventures
travco group holding sae    500 incoming agency egypt
le passage to india tours and travels private limited   500 incoming agency india
atlantica hellas sa    500 hotel operator greece
atlantica hotels  resorts limited    499 hotel operator cyprus
togebi holdings limited    490 tour operator cyprus
associates
sunwing travel group inc    250 tour operator canada
tui infotec gmbh    499 it services germany
togebi holdings limited operates through subsidiaries in russia and ukraine
11 property plant and equipment continued
impairment charges
of the impairment charge in the year ended 30 september 2011 of £18m 2010 £15m £12m 2010 £15m relates to one owned ship within  
the uk operating segment the ‘island escape’
an impairment charge of £15m was booked in relation to this ship in the year ended september 2010 after an expanded class survey on the 
condition of the ship revealed that it would require a more extensive drydock than was originally expected due to steelwork corrosion the 
recoverable amount in 2010 using fair value less costs to sell basis of valuation was derived from obtaining an independent market valuation 
from an external international shipping consultancy using open market value the carrying value was impaired to the extent that it was above 
recoverable value
during the year ended 30 september 2011 a further £12m impairment charge was required because the costs of this drydock escalated further 
and difﬁcult market conditions meant it was not possible to sell the ship for what was considered its market value at september 2010 the 
recoverable amount of the asset has therefore been calculated using the value in use basis it is derived from the cash ﬂow projections for this 
asset based on the group’s latest approved ﬁveyear business plan discounted at the group’s wacc and adjusted as appropriate for business 
speciﬁc factors to give a posttax discount rate of 10 the carrying value was impaired to the extent that it was above recoverable value
advance payments for future delivery of aircraft
interest of £7m 2010 £5m has been capitalised during the year in relation to the advance payments for future delivery of aircraft at a rate  
of 54 2010 54
other disclosures
other property plant and equipment with a combined net book value as at 30 september 2011 of £154m 2010 £167m includes £112m 2010 
£114m of ﬁxtures and ﬁttings £17m 2010 £24m of property plant and equipment under construction and £24m 2010 £28m of motor vehicles
some rotable and repairable aircraft spares with a net book value of £9m were disclosed as inventory at 30 september 2010 but have been 
transferred to aircraft and equipment within property plant and equipment in the current year these changes were undertaken to ensure 
consistent presentation across the group and because these assets are held for long term economic beneﬁt
land and buildings comprise freehold and long leasehold properties with net book values of £135m 2010 £118m and short leasehold properties 
with a net book value of £50m 2010 £53m respectively
the net book value of assets held under ﬁnance leases and hire purchase contracts at 30 september 2011 was £146m 2010 £201m this 
includes £103m 2010 £109m of ships yachts and motorboats £26m 2010 £79m of aircraft £8m 2010 £7m of land and buildings and  
£9m 2010 £6m of other assets mainly vehicles
the net book value of property plant and equipment with restrictions on title being pledged as security for bank loans amounted to £29m 
2010 £27m financial statements
notes to the consolidated ﬁnancial statements continued
financial statements
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group at a glance strategic overview business and ﬁnancial review governance financial statements shareholder information
13 investments
acquisitions
a acquisitions in the year ended 30 september 2011
acquisitions were made in the year for a total investment value of £69m in order to expand business operations in line with the group’s growth 
strategy in accordance with the provisions of ifrs 3 revised incidental acquisition costs of £11m and £5m of remuneration for postcombination 
services have been expensed within administrative expenses and disclosed as an acquisition related expense in the consolidated income statement 
in the year these acquisitions gave rise to provisional goodwill of £57m the principal acquired businesses and their acquisition dates were
business description date country
mainstream sector
geo reisebüro  franchisesystem travel agent november 2010 austria
travel  more gmbh travel agent march 2011 germany
centrum podrozy sa travel agent december 2010 poland
specialist  activity sector
intrepid travel pty ltd tour operator april 2011 australia
great atlantic travel and tour inc tour operator july 2011 usa
the english language centre york limited language teaching july 2011 united kingdom
accommodation  destinations sector
top class – european cruise services sam cruise handling october 2010 monaco
lima tours sac tour operator january 2011 peru
gateway guest services usa llc tms gateway cruise services june 2011 usa
in addition to the above the group acquired 27 individually insigniﬁcant germanbased travel agency businesses and one insigniﬁcant austrian
based travel agency business for a total consideration of £4m during the year ended 30 september 2011
the group acquired 100 of the voting equity instruments in respect of each acquisition completed during the year with the exception of great 
atlantic travel and tour inc of which 75 of the voting equity instruments were acquired intrepid travel pty ltd of which 60 of the voting 
equity instruments were acquired and geo reisebüro  franchisesystem which was an asset deal
the relative size of the acquisitions made is set out in the table below
       total total
consideration      number of consideration goodwill
£m      acquisitions £m £m
05      6 7 6
510      1 5 3
 10      2 53 45
total      9 65 54
other individually insigniﬁcant businesses      28 4 3
total      37 69 57
the total provisional net assetsliabilities acquired are set out below
        fair value of
        net assets
        liabilities
        acquired
        £m
fair value of net assetsliabilities acquired
intangible assets        18
property plant and equipment        2
trade receivables        22
investments        3
cash        11
current liabilities excluding debt        35
deferred tax provision        5
other noncurrent liabilities excluding debt        2
interestbearing liabilities        2
total        12
total consideration        69
less net assets acquired as above        12
total goodwill        57
of the trade receivables above £22m represents the gross and fair contractual value of the amount of the receivables there were no material 
amounts of contractual cash ﬂows not expected to be recoverable
12 investment in joint ventures associates and other investments continued
a summary of the results for the year ended 30 september 2011 and of the assets and liabilities at this date of the group’s joint ventures and 
associates is shown below
   joint   joint
   ventures associates total ventures associates total
   2011 2011 2011 2010 2010 2010
100 values   £m £m £m £m £m £m
revenue   752 842 1594 792 618 1410
operating costs   754 795 1549 781 623 1404
operating lossproﬁt   2 47 45 11 5 6
net interest payable   4 – 4 2 1 3
lossproﬁt before taxation   6 47 41 9 6 3
taxation   4 1 5 5 3 8
lossproﬁt after taxation for the year   10 46 36 4 9 5
noncurrent assets   83 144 227 169 159 328
current assets   293 265 558 158 184 342
total assets   376 409 785 327 343 670
noncurrent liabilities   210 186 396 59 60 119
current liabilities   62 53 115 154 145 299
total liabilities   272 239 511 213 205 418
net assets   104 170 274 114 138 252
sunwing strategic venture
the canadian mainstream business was classiﬁed as a disposal group as at 30 september 2009 and disclosed as held for sale on the basis of  
the then announced strategic venture transaction with sunwing travel group inc sunwing the respective parties received all the necessary 
regulatory approvals and completed the transaction on 14 january 2010 on this date sunwing was accounted for as an acquisition of an 
associate in accordance with ias 27 revised
togebi holdings limited
the group has an agreement with sgroup capital management limited sgcm regarding togebi holdings limited a jointlyowned 
investment holding company owned 51 by sgcm and 49 by the group the joint venture owns three subsidiary tour operators and travel 
agency groups in russia and ukraine being mostravel vko group and voyage kiev
all major decisions have to be agreed by both shareholders and under ias 31 interests in joint ventures the entity is therefore accounted  
for as a joint venture
sgcm is owned by a signiﬁcant shareholder of tui ag and is therefore considered to be a related party togebi holdings limited and its 
subsidiary undertakings are therefore considered to be related parties by virtue of sgcm being the joint venturer to this investment
other investments
      trade non
      and listed consolidated
      investments entities total
      £m £m £m
at 1 october 2009      47 30 77
disposals      9 – 9
reclassiﬁcation to noncurrent interestbearing receivables     7 – 7
investments consolidated for the ﬁrst time      – 4 4
change in the fair value of available for sale ﬁnancial asset     4 – 4
change in the fair value of assets held at fair value through proﬁt and loss    30 – 30
foreign exchange      1 3 4
at 30 september 2010      56 23 79
additions      – 1 1
disposals      4 – 4
investments consolidated for the ﬁrst time      – 1 1
impairment during the year      – 2 2
change in the fair value of available for sale ﬁnancial asset     1 – 1
at 30 september 2011      51 21 72
other investments of £72m 2010 £79m comprise trade and listed investments and nonconsolidated entities
trade and listed investments at 30 september 2011 represented the group’s 143 2010 143 shareholding in the airline group limited 
which in turn has a 42 shareholding in national air trafﬁc services limited a 60 2010 72 shareholding in air berlin plc and a 10 
2010 10 shareholding in the atlantica leisure group limited
in 2010 the group increased the fair value of its investment in the airline group and reclassiﬁed the loan note element of this investment to 
noncurrent interestbearing receivables the uplift in the value of the investment of £30m was credited to separately disclosed items note 4 
there has been no change to this valuation in 2011
nonconsolidated entities are recorded at cost and reﬂect the group’s net investment held in circa 50 subsidiaries which due to the immaterial 
size of their revenues result and ﬁnancial position have not been consolidated balances between these entities and consolidated subsidiaries 
have not been eliminated financial statements
notes to the consolidated ﬁnancial statements continued
financial statements
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110 tui travel plc annual report  accounts 2011 tui travel plc annual report  accounts 2011 111
group at a glance strategic overview business and ﬁnancial review governance financial statements shareholder information
the consideration payable was valued using an earnings multiple of seven times being applied to the combined results of the above businesses 
and their subsidiaries for the then most recent ﬁnancial year ended being 30 september 2010 the total valuation calculated was au60m 
equivalent to £39m
there is no cash or contingent consideration on this acquisition
the residual provisional goodwill on this acquisition represents the value of assets and earnings that do not form separable assets under  
ifrs 3 revised but nevertheless are expected to contribute to the future results of the group residual goodwill in respect of this acquisition 
represents principally
• integration synergies
• involvement of existing management and employees and transfer of their knowledge of the operation of the business model
• the ability to sell acquired product through existing channels and existing product through acquired channels
the goodwill is deemed provisional at this stage as the group continues to review the fair values of assets and liabilities the main elements that 
remain under review are noncurrent assets trade receivables and current liabilities
noncontrolling interest of £46m has been recognised at the acquisition date primarily representing the 40 of the group’s adventure business 
before the transaction together with 40 of the intrepid group not within the group’s control after the transaction the consideration for 
acquisition of £39m being the disposal of 40 of the group’s share of the above adventure businesses that it no longer owns is recognised 
directly in equity in accordance with ias 27 revised
if intrepid travel pty limited had been part of the group since 1 october 2010 group revenue would have been increased by £26m to £14713m 
the proﬁt before tax for the year of £144m would have been less than £1m lower on this basis this amount has been calculated after applying 
the group’s accounting policies and adjusting for charging amortisation of business combination intangibles had those intangible assets been 
recognised since 1 october 2010
the acquired businesses contributed revenues of £38m and proﬁt after tax including amortisation of business combination intangibles of £3m
contingent consideration
ifrs 3 revised requires consideration that is contingent on future service by the vendor to be expensed over the service period and acquisition 
costs to be expensed as incurred in this respect £16m 2010 £9m has been expensed in the year and included in the acquisition related 
expenses in the consolidated income statement
       year ended year ended
       30 september 30 september
       2011 2010
       £m £m
acquisition related expenses in operating proﬁt
amortisation of business combination intangibles      66 54
other acquisition related expenses       11 7
remuneration for postcombination services       5 2
total       82 63
movements in deferred and contingent consideration in the year were as follows
     deferred contingent
     consideration consideration loan notes total
     £m £m £m £m
at 30 september 2010     21 34 2 57
recognised in the year relating to current year acquisitions    4 2 2 8
adjustments to amounts recognised in respect of prior period acquisitions   9 13 1 23
cash paid     11 8 2 21
foreign exchange     1 1 – –
at 30 september 2011     4 16 1 21
includes capitalised and expensed amounts contingent consideration is deﬁned within note 1cvii
deferred and contingent consideration payable is dependent on the results of the businesses over a number of future periods and in some 
cases is also dependent upon the previous owners or management of those businesses remaining in employment with the group during the 
earn out period
adjustments to amounts recognised in respect of prior period acquisitions of £23m reﬂects an £8m reduction following a legal settlement over the 
consideration payable for an acquisition the remainder reﬂects reductions in both the amounts settled in the year against the amounts accrued 
and the expected amount still to pay in future years these latter amounts reﬂect changes in the range of outcomes following lower than expected 
earnings ﬁgures by these acquired entities with the contingent consideration being based upon a multiple of the appropriate earnings ﬁgures
13 investments continued
all acquisitions have been accounted for using the purchase method as required by ifrs 3 revised it should be noted that certain fair value 
adjustments and the value of contingent consideration have necessarily been prepared on a provisional basis due to the recent timing of certain 
acquisitions the periods over which contingent consideration may become payable and the seasonality of businesses such that fair values can 
only be determined accurately once a season has passed experience may result in revisions to fair values in the subsequent accounting period 
no material amount of goodwill is expected to be deductible for tax purposes
there are no material accounting policy adjustments nor any signiﬁcant differences between the book and fair values of assets and liabilities acquired
the consideration payable is made up of
        £m
cash        23
contingent consideration        3
deferred consideration        4
fair value of 40 in adventure travel business see below       39
total consideration        69
the provisional goodwill arising in the year of £57m 2010 £31m arises from 37 2010 31 separate acquisitions one single acquisition in the 
current year is considered material to goodwill being the acquisition of intrepid travel pty ltd further disclosure is provided below
intrepid travel pty limited
on 4 april 2011 the group acquired 60 of the ordinary equity instruments of intrepid travel pty limited for the purpose of expanding the 
specialist  activity sector’s growth strategy
the total provisional net assetsliabilities acquired are set out below
        fair value of
        net assets
        liabilities
        acquired
        £m
fair value of net assetsliabilities acquired
intangible assets        7
property plant and equipment        1
investments        2
trade receivables        15
cash        8
current liabilities excluding debt        28
other noncurrent liabilities excluding debt        2
interestbearing liabilities        2
total        1
total consideration        39
less net assets acquired as above        1
total provisional goodwill in respect of acquisitions       38
of the trade receivables above £15m represents the gross and fair contractual value of the amount of the receivables there were no material 
amounts of contractual cash ﬂows not expected to be recoverable there are no material accounting policy adjustments nor any signiﬁcant 
differences between the book and fair values of assets and liabilities acquired
total consideration of £39m represents the group’s 40 share of its existing adventure travel business headed by the following companies 
which made up the consideration as follows
       number of ordinary
        shares provided
company        as consideration
active safari pty ltd        2
active travel  recruitment pty ltd        1
adventure tours australia group pty ltd        9223871
australia adventure tours pty ltd        63045
australian pinnacle holidays pty limited        1
fc adventures canada inc        1103870
first choice holdings australia pty ltd        10191178
peak adventure travel usa inc        411273
pinnacle services pty limited        1
pinnacle tours pty limited        4800
pinnacle travel centre 1987 pty limited        14000
the imaginative traveller australia pty ltd        28000
tkj pty ltd        344840
trek investco limited        6740867
tropical car rental pty limited        2 financial statements
notes to the consolidated ﬁnancial statements continued
financial statements
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112 tui travel plc annual report  accounts 2011 tui travel plc annual report  accounts 2011 113
group at a glance strategic overview business and ﬁnancial review governance financial statements shareholder information
f prior period revisions to fair values
in the year ended 30 september 2010 the group acquired various businesses for a total consideration of £43m the ﬁnalisation of the acquisition 
balance sheets for these businesses has not led to a material adjustment to goodwill presented in the 2010 accounts and therefore there is no 
restatement of the results for the year ended 30 september 2010 or balance sheet as at 30 september 2010 in respect of these ﬁnalisations
g gains and losses in subsequent periods
ifrs 3 revised and its predecessor ifrs 3 2004 require disclosure in the current year of any material gain or loss in the current period in 
respect of material business combinations in 2011 the group has impaired the brand of island escape by £5m and the customer list of 
explorers travel by £1m in the comparative year the group impaired the asset of island escape by £15m
disposals
during the year ended 30 september 2011 the group disposed of its 70 shareholding in danubius travel srl constanta romania for 
consideration of £1m and generating a proﬁt of less than £1m
14 deferred tax assets and liabilities
  assets liabilities net
    
   year ended year ended year ended year ended year ended year ended
   30 september 30 september 30 september 30 september 30 september 30 september
   2011 2010 2011 2010 2011 2010
   £m £m £m £m £m £m
intangible assets   21 1 93 150 72 149
finance lease transactions   – – 2 32 2 32
property plant and equipment   85 97 40 47 45 50
financial instruments and foreign exchange   – 32 16 37 16 5
employee beneﬁts   88 126 – – 88 126
other short term temporary differences   161 556 218 547 57 9
tax value of losses carried forward   81 87 – – 81 87
total   436 899 369 813 67 86
set off of deferred tax within the same jurisdiction  298 785 298 785 – –
net tax assetsliabilities   138 114 71 28 67 86
the group has recognised deferred tax assets relating to tax losses in individual tax jurisdictions based on forecast future taxable proﬁts
the deferred tax balance associated with the pension deﬁcit has been adjusted to reﬂect the current tax beneﬁt obtained in the current year 
following the contribution of the first choice and thomson brands into the pension schemes as explained in note 6c
unrecognised deferred tax assets
deferred tax assets have not been recognised in respect of the following items reported at the applicable tax rate
       30 september 30 september
       2011 2010
       £m £m
capital losses       3 3
other losses       233 197
total losses       236 200
these assets have not been recognised principally because the directors are not certain of the timing of any beneﬁts that might arise in the 
future other losses includes £14m which are subject to a fouryear expiry period the balance of losses are not subject to time expiry and  
are available for utilisation against proﬁts arising in future periods in the territories in which they have arisen there are no other unprovided 
deferred tax liabilities nor unrecognised deferred tax assets
movements in deferred taxation during the current year
      recognised
      charged
      outside of the
  balance at   recognised  consolidated  balance at
  1 october arising on extinguished charged income foreign 30 september
  2010 acquisition on disposal in income statement exchange 2011
  £m £m  £m £m £m £m £m
intangible assets  149 3 3 21 107 9 72
finance lease transactions  32 – – 29 – 1 2
property plant and equipment  50 – – 5 1 1 45
financial instruments and foreign exchange  5 – 2 12 20 1 16
employee beneﬁts  126 1 2 34 3 – 88
other short term temporary differences  9 1 3 39 110 1 57
tax value of losses carried forward  87 – – 6 – – 81
total  86 5 4 14 27 7 67
13 investments continued
further details of deferred and contingent consideration payable in less than one year and after more than one year is given in notes 20 and 22 
respectively
the contingent and deferred consideration payable arising in the year is in respect of the acquisitions listed below it is dependent on the results 
of the businesses over the following periods or the balance of working capital at the acquisition date and the directors believe the amounts 
reﬂect the most likely outcome in each case
 basis of calculation period for calculation expected range
acquisition  of consideration of consideration of consideration
lima tours sac earnings and employment up to 30 june 2014 usd 38m
tms gateway earnings and employment up to 31 march 2012 gbp 2m
other individually insigniﬁcant considerations earnings and employment up to 31 december 2011 gbp 1m
total contingent consideration recognised  
in respect of current year acquisitions   gbp 58m
expected consideration payable represents the expected consideration that the group will be obliged to pay following an assessment of the 
range of possible contingent amounts of consideration
the expected contingent consideration for all acquisitions above is calculated using multiples of underlying earnings as all of the above acquisitions 
are within the fair valuing period since their date of acquisition there have been no material changes to the amounts recognised in the year
b cash ﬂows arising in respect of acquisitions
total cash ﬂows relating to acquisitions in the year including amounts paid in respect of deferred and contingent consideration arising on prior 
period acquisitions are as follows
       expected 2011
       total paid
       £m £m
acquisitions in the current year       62 23
deferred and contingent consideration arising and paid      7 1
cash outﬂow relating to current year acquisitions excluding acquisition related expenses   69 24
cash acquired with acquisitions        11
net cash outﬂow in the year relating to current year acquisitions      13
cash paid relating to prior period acquisitions including settlement of acquisition related loan notes    20
net cash outﬂow in the year relating to acquisitions       33
acquisition related expenses        11
total cash outﬂows in the year relating to acquisitions       44
c residual goodwill
a consistent process is undertaken at each acquisition to identify the fair value of separable assets and liabilities acquired including the fair 
value of intangible assets being brands order books licences customer relationships and other intangible assets the residual goodwill on 
acquisition represents the value of assets and earnings that do not form separable assets under ifrs 3 revised but nevertheless are expected 
to contribute to the future results of the group
residual goodwill in respect of current year acquisitions represents principally
• market knowledge of and access to particular geographic areas
• knowledge of particular market segments for example language training
• involvement of existing management and employees and transfer of their knowledge of the operation of the business model
• integration synergies
• the ability to sell acquired product through existing channels and existing product through acquired channels in all sectors
d consolidated income statement
if the results of the acquired businesses from the 1 october 2010 until each of their respective acquisition dates had been included in these 
consolidated ﬁnancial statements the group‘s revenue and proﬁt would have been £42m and less than £1m higher respectively this amount 
has been calculated after applying the group’s accounting policies and adjusting for amortisation of business combination intangibles had those 
intangible assets been recognised since 1 october 2010
since the respective acquisition dates the acquired businesses contributed revenues of £65m and proﬁt after tax including amortisation of 
business combination intangibles of £2m
e acquisitions post balance sheet date
subsequent to 30 september 2011 the group acquired eurolink in the way of an asset deal for consideration of €2m
the accounting for this acquisition has not yet been ﬁnalised financial statements
notes to the consolidated ﬁnancial statements continued
financial statements
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114 tui travel plc annual report  accounts 2011 tui travel plc annual report  accounts 2011 115
group at a glance strategic overview business and ﬁnancial review governance financial statements shareholder information
the maximum exposure to credit risk for the ﬁnancial assets included within trade and other receivables by geographic region was
        restated
       30 september 30 september
       2011 2010
       £m £m
united kingdom       199 191
germany       95 121
france       67 75
other european countries       213 291
rest of the world       119 54
total       693 732
trade receivables are disclosed net of provisions for bad and doubtful debts an analysis of which is shown below
       30 september 30 september
       2011 2010
       £m £m
balance at the beginning of the year       55 59
foreign exchange       1 2
charge to the consolidated income statement       25 17
utilisation of provision       21 19
total       58 55
the ageing of the ﬁnancial assets included within trade and other receivables at the balance sheet date was
  30 september 2011 30 september 2010
   
   gross provision net gross provision net
   £m £m £m £m £m £m
not overdue   481 3 478 539 2 537
overdue 130 days   143 3 140 113 3 110
overdue 3190 days   64 2 62 38 1 37
overdue 91180 days   16 4 12 15 2 13
overdue more than 180 days   47 46 1 82 47 35
total   751 58 693 787 55 732
no individually material bad debt provision movements or changes have been recorded in the year based on past experience and the post 
balance sheet period to the date of approval of these consolidated ﬁnancial statements the group considers that the provision allowance 
recorded is adequate within the provision there are no individually material amounts held trade receivables not overdue and not impaired 
include amounts due from travel agencies tour operators and hoteliers in respect of mainstream specialist  activity and accommodation  
destinations sectors
credit exposure to individual passengers booking holidays directly is limited by the group’s policy that full payment is required before the issue 
of tickets and holiday departure in the case of travel services sold by third party agents the credit risk depends on the creditworthiness of 
those third parties but this risk is also limited because of the relatively short period of credit
the provision against overdue receivables of £55m 2010 £53m relates to gross receivables of £77m 2010 £94m
there are £193m of receivables that are overdue and not impaired at 30 september 2011 2010 £154m
17 cash and cash equivalents
a cash and cash equivalents
       30 september 30 september
       2011 2010
       £m £m
cash in hand       20 18
cash at bank       267 234
deposits       615 1052
cash and cash equivalents       902 1304
cash and cash equivalents includes £46m 2010 £51m that is not available for immediate use by the group this is made up of monies held to 
meet regulatory requirements plus cash balances on short term deposits held on a restricted basis by the group’s captive insurance funds as 
part of their ongoing operations
deposits include an amount of £nil 2010 £370m which is deposited with the parent company tui ag and is repayable on demand
b other investments
other current investments disclosed in the consolidated balance sheet comprise of £20m deposit balances 2010 £nil held to meet regulatory 
requirements with a term exceeding three months and £2m 2010 £5m of other deposits with a maturity in excess of three months
14 deferred tax assets and liabilities continued
movements in deferred taxation during the prior year are analysed as follows
      recognised
      charged
      outside of the
  balance at   recognised  consolidated  balance at
  1 october arising on extinguished charged income foreign 30 september
  2009 acquisition on disposal in income statement exchange 2010
  £m £m  £m £m £m £m £m
intangible assets  186 4 26 13 1 3 149
finance lease transactions  24 – – 8 – – 32
property plant and equipment  37 – 1 14 – – 50
financial instruments and foreign exchange  5 – 1 – 9 2 5
employee beneﬁts  117 – – 5 13 1 126
other short term temporary differences  88 – 5 38 39 7 9
tax value of losses carried forward  77 – 11 20 – 1 87
total  114 4 20 4 36 4 86
intangible asset temporary differences arise in respect of assets recognised on acquisition property plant and equipment temporary 
differences principally relate to tax depreciation in the uk france and germany employee beneﬁts temporary differences arise in respect of 
deﬁned beneﬁt pension scheme liabilities and future deductions available on the vesting of employee awards financial instruments and foreign 
exchange temporary differences arise in respect of ﬁnancial instruments accounted for under ias 39 and principally reﬂect the fair value at  
30 september 2011 of cash ﬂow hedging derivatives that will be settled against future transactions other short term temporary differences 
relate to operating expenses and related accruals and provisions for which a tax deduction has not yet been recognised
15 inventories
       restated  restated
      30 september 30 september 30 september
      2011 2010 2009
      £m £m £m
marine inventories      31 15 17
airline spares and operating equipment      24 24 21
other operating inventories      14 15 18
total      69 54 56
other operating inventories have increased by £5m as at 30 september 2009 and 2010 following the restatement disclosed in note 1bii
included within cost of sales in the year is a writedown of inventories by £1m to net realisable value the reversal of a writedown of inventories 
to net realisable value amounted to £2m in 2010
16 trade and other receivables
  restated  restated
 30 september 2011 30 september 2010 30 september 2009
   
   non   non   non
  current current total current current total current current total
  assets assets assets assets assets assets assets assets assets
  £m £m £m £m £m £m £m £m £m
trade receivables gross  568 – 568 644 – 644 666 – 666
less provision for impairment  58 – 58 55 – 55 59 – 59
  510 – 510 589 – 589 607 – 607
amounts owed by related parties  48 – 48 54 – 54 33 – 33
interestbearing other receivables  – 13 13 – 7 7 – – –
other receivables  241 42 283 218 34 252 279 43 322
  799 55 854 861 41 902 919 43 962
prepayments  673 147 820 564 115 679 588 151 739
total  1472 202 1674 1425 156 1581 1507 194 1701
following the restatement disclosed in note 1bii as at 30 september 2010 trade receivables have increased by £3m 2009 £3m amounts 
owed by related parties have increased by £1m 2009 £7m other receivables have increased by £14m 2009 £13m and prepayments have 
increased by £3m 2009 £2m
other receivables include aircraft related receivables lease and security deposits derivative settlement receivables and various end of season 
rebates due from suppliers financial statements
notes to the consolidated ﬁnancial statements continued
financial statements
wwwtuitravelplccom wwwtuitravelplccom
116 tui travel plc annual report  accounts 2011 tui travel plc annual report  accounts 2011 117
group at a glance strategic overview business and ﬁnancial review governance financial statements shareholder information
finance lease liabilities relate primarily to the leasing of aircraft boats and cruise ships group obligations under ﬁnance leases and hire purchase 
contracts are payable as follows
     minimum   minimum
     lease payments   lease payments
     30 september   30 september
   principal interest 2011 principal interest 2010
   £m £m £m £m £m £m
in respect of aircraft yachts and equipment payable within
one year   19 5 24 142 12 154
one to ﬁve years   71 13 84 78 14 92
after ﬁve years   42 14 56 49 16 65
total   132 32 164 269 42 311
convertible bonds
       30 september 30 september
       2011 2010
       £m £m
£350m convertible bond 60 october 2014       315 304
£400m convertible bond 49 april 2017       339 329
total       654 633
the group has two convertible bonds in issue details are as follows
a £350m ﬁxed rate 6 bond was issued in october 2009 raising £341m net of issue costs the bond is convertible at the option of the holder 
before or upon maturity in october 2014 conversion into ordinary shares will occur at a premium of 33 to the group’s share price on the date 
of issuance
a £400m ﬁxed rate 49 bond was issued in april 2010 raising £391m net of issue costs the bond is convertible at the option of the holder 
before or upon maturity in april 2017 conversion into ordinary shares will occur at a premium of 33 to the group’s share price on the date  
of issuance
the group holds an issuer call option to redeem the convertible bonds at their principal amounts together with accrued interest upon 
fulﬁlment of certain predetermined criteria the fair value of this option was negligible at 30 september 2011 the equity portion of the  
bonds of £114m 2010 £114m gross of deferred tax of £29m 2010 £31m is included in the convertible bond reserve
reconciliation of face value to carrying amount
      £350m £400m total
      convertible convertible convertible
      bond bond bonds
      £m £m £m
convertible bond – face value      350 400 750
issue cost      9 9 18
cash received      341 391 732
equity portion      48 66 114
accretion interest      9 4 13
issue costs amortised      2 – 2
carrying amount at 30 september 2010      304 329 633
accretion interest      9 9 18
issue costs amortised      2 1 3
carrying amount at 30 september 2011      315 339 654
20 current trade and other payables
       restated restated
      30 september 30 september 30 september
      2011 2010 2009
      £m £m £m
trade payables      1360 1372 1428
deferred and contingent consideration note 13a     10 25 23
other payables      140 187 234
amounts owed to related parties      99 107 185
other taxes and social security costs      87 66 101
accruals and deferred income      1222 1065 1005
client money received in advance      1704 1513 1306
total      4622 4335 4282
please refer to note 1bii for a full explanation of the restatement
18 assets classiﬁed as held for sale
       30 september 30 september
       2011 2010
       £m £m
yachts and motor boats       – 1
land and buildings       1 1
aircraft       7 15
disposal groups – assets       – 30
other       5 10
total assets classiﬁed as held for sale       13 57
disposal groups – liabilities       – 31
net assets classiﬁed as held for sale       13 26
at 30 september 2010 the disposal group assets and liabilities held for sale comprised société d’investissement aérien sa jet4you as stated in 
note 1bii as a result of the cessation of negotiations for the sale of jet4you in the ﬁrst half of this ﬁnancial year this business ceases to qualify 
as held for sale in accordance with ifrs 5 the results of jet4you are presented in the consolidated income statement as continuing in both the 
current and comparative year the balance sheets for comparative years have not been represented or remeasured as dictated by ifrs 5
assets held for sale are expected to be sold within 12 months
19 interestbearing loans and borrowings
       30 september 30 september
       2011 2010
       £m £m
current liabilities
amounts owed to related parties       26 575
bank loans and overdrafts       11 1
loan notes       1 1
finance leases and hire purchase contracts       19 142
other ﬁnancial liabilities       39 38
total       96 757
other ﬁnancial liabilities comprise the ‘fair value’ of two put options written by the group to the sole remaining noncontrolling interest 
shareholder in l’tur tourismus ag that may require the group to purchase the noncontrolling interest shareholding during the prior year the 
group increased its shareholding from 51 to 70 on the exercise of part of one of the options the remainder of this put option over 20 of 
the shares may be exercised at any time until 2015 a further put option at a ﬁxed price with no time limit has been written by the group during 
the year to the same noncontrolling interest shareholder for the remaining 10 shareholding
fair value changes in the put option liability are included within ﬁnancial expenses or ﬁnancial income
       30 september 30 september
       2011 2010
       £m £m
noncurrent liabilities
amounts owed to related parties       10 –
bank loans       19 35
loan notes       – 1
finance leases and hire purchase contracts       113 127
convertible bonds       654 633
other ﬁnancial liabilities       6 –
total       802 796
the bank loans and loan notes are repayable
       30 september 30 september
       2011 2010
       £m £m
within one year       12 2
between one and ﬁve years       19 36
total       31 38
certain loans are secured on the underlying assets of the company in whose name the borrowings are made
at 30 september 2011 and 30 september 2010 the related party loans were all repayable within ﬁve years financial statements
notes to the consolidated ﬁnancial statements continued
financial statements
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group at a glance strategic overview business and ﬁnancial review governance financial statements shareholder information
23 called up share capital
       30 september 30 september
       2011 2010
       £m £m
issued and fully paid
1118010670 2010 1118010670 ordinary shares of 10p each      112 112
total       112 112
as described more fully in note 34 the ultimate parent company tui ag is the beneﬁcial owner of 5547 of the company’s issued ordinary 
share capital as at 30 september 2011
at 30 september 2011 12700211 shares 2010 13191246 shares were held by the group’s employee beneﬁt trusts based on 30 september 
2011 share price of £149 2010 £214 the value of shares held was £18961415 2010 £28282031
during the year ended 30 september 2011 the group’s employee beneﬁt trusts acquired 3m shares at market value for consideration of £7m 
2010 £7m
details of dividends debited to equity in the year are set out in note 9 of the consolidated ﬁnancial statements
whilst the company has the authority to purchase its own shares it has not done so in either the current or prior years
24 capital and reserves
   other reserves
  
   convertible     equity non
  called up bonds merger translation hedging accumulated holders controlling
  share capital reserve reserve reserve reserve losses of parent interest total
 note £m £m £m £m £m £m £m £m £m
balance at 1 october 2009  
as previously reported  112 – 2490 360 75 716 2171 3 2174
adjustment in respect of magic life  
note 1bii  – – 11 12 – – 23 – 23
balance at 1 october 2009 restated  112 – 2479 348 75 716 2148 3 2151
loss for the year restated  – – – – – 123 123 – 123
other comprehensive expense 
income for the year  
as previously reported  – – – 59 56 70 73 – 73
adjustment in respect of magic life  – – – 3 – – 3 – 3
other comprehensive expense 
income for the year restated  – – – 56 56 70 70 – 70
total comprehensive expense 
income for the year restated  – – – 56 56 193 193 – 193
transactions with owners
sharebased payment  – – – – – 20 20 – 20
acquisition of shares by  
employee beneﬁt trust  – – – – – 7 7 – 7
dividends 9 – – – – – 118 118 2 120
issue of convertible bond  
net of deferred tax 19 – 83 – – – – 83 – 83
capital increase in magic life  – – 42 – – – 42 – 42
at 30 september 2010 restated  112 83 2521 292 19 1014 1975 1 1976
21 provisions for liabilities
     aircraft
     maintenance restructuring other total
     £m £m £m £m
at 1 october 2010 as previously stated     330 58 155 543
restatement note 1bii     – – 5 5
at 1 october 2010 as restated     330 58 160 548
provided in the year     246 30 88 364
released in the year     22 1 18 41
unwinding of discounted amount     10 – 1 11
costs incurred     130 29 58 217
foreign exchange     1 2 2 5
at 30 september 2011     435 60 175 670
analysed as
noncurrent     263 29 61 353
current     172 31 114 317
     435 60 175 670
at 30 september 2010
analysed as
noncurrent     236 26 45 307
current     94 32 115 241
     330 58 160 548
at 30 september 2009
analysed as
noncurrent     205 2 43 250
current     49 28 117 194
     254 30 160 444
please refer to note 1bii for a full explanation of the restatement
aircraft maintenance
in respect of aircraft provision is made for maintenance overhaul and repair costs of operating leased airframes engines and certain other 
components based on total anticipated costs over the useful economic life of the asset calculated by reference to costs experienced and 
published manufacturers’ data the charge to the income statement is calculated by reference to the number of hours and cycles ﬂown and  
by reference to the length of the full overhaul cycle costs incurred are charged against the provision neither the timing nor the value of the 
expenditure can be precisely determined but they can be averaged over time and over a ﬂeet
restructuring
restructuring which includes severance payments relates to provisions arising as a result of reorganisation and restructuring plans that are 
irrevocably committed further details of restructuring projects in the current year are set out in note 4
the provision is expected to be utilised within 18 months of the balance sheet date
other
other provisions relate to litigation including provisions for contingent liabilities recorded on the merger of first choice onerous lease contracts 
that have been entered into in the ordinary course of business and other future obligations the amount or timing of which is uncertain the 
majority of the provision is anticipated to be utilised within 12 months of the balance sheet date while the remainder is expected to be utilised 
within one to four years of the balance sheet date although the timing and payments related to individual litigation claims are estimated and are 
inherently uncertain
22 noncurrent trade and other payables
       30 september 30 september
       2011 2010
       £m £m
deferred and contingent consideration note 13a      10 30
other payables       13 19
accruals and deferred income       33 44
total       56 93 financial statements
notes to the consolidated ﬁnancial statements continued
financial statements
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120 tui travel plc annual report  accounts 2011 tui travel plc annual report  accounts 2011 121
group at a glance strategic overview business and ﬁnancial review governance financial statements shareholder information
25 financial instruments
a treasury risk overview
the group is exposed to a variety of ﬁnancial risks
• market risk in respect of foreign currency rate risk jet fuel price risk and interest rate risk
• liquidity risk in respect of the group’s ability to meet its liabilities
• credit risk in respect of recovery of amounts owing to the group
• capital risk in respect of its capital structure and cost of capital
the group’s key ﬁnancial market risks are in relation to foreign currency rates and jet fuel prices currency risk results from the substantial 
crossborder element of the group’s trading and arises on sales purchases and borrowings that are denominated in a currency other than the 
functional currencies of individual group businesses the risk is managed by the use of foreign exchange forward swap and option contracts 
the group’s exposure to jet fuel prices results from the aircraft ﬂeet operations and is managed using commodity swaps and options
the group is exposed to interest rate risk that arises principally from the group’s ﬂoating rate aircraft leases and ﬂoating rate bank loans and 
cash balances certain ﬁnance leases and loans have ﬁxed interest rates
credit risk liquidity risk and capital risk are considered in notes 25d 25f and 25k respectively
the board of directors has overall responsibility for the establishment and oversight of the group’s risk management framework and for 
ensuring that the group has adequate policies procedures and controls to successfully manage the ﬁnancial risks that it faces these form  
part of the group’s overall risk management framework the framework
incorporated within the framework’s terms of reference are the determination of all treasury policies and the monitoring of the effectiveness  
of those policies group treasury implements the agreed policies on a daytoday basis the procedures also stipulate the levels of authority 
applied to approving and to dealing the types of hedging ﬁnancial instrument used to manage these exposures transactions are only undertaken  
to hedge underlying exposures financial instruments are not traded nor are speculative positions taken
the treasury position of the group including liquidity foreign exchange and fuel hedging exposure is managed centrally in accordance with 
policies appropriate to cover speciﬁc risks faced by each business unit and is the responsibility of the chief financial ofﬁcer and group treasurer
group treasury conducts regular reviews of ﬁnancial risks with business unit management teams and receives regular cash ﬂow and where 
relevant jet fuel usage forecasts from each business unit to ensure hedging instruments match the currency or fuel requirements of each 
operating business reports and forecasts for the group showing hedging instruments and forecast requirements are submitted monthly  
to the gmb and to each board meeting of tui travel plc
in line with its established policy the group has monitored throughout the year its counterparty exposure with individual ﬁnancial institutions 
such counterparty risk can arise by way of cash deposited or derivative instruments traded
b currency risk management
the group is exposed to currency risk on sales purchases and borrowings that are denominated in a currency other than the functional 
currencies of individual group businesses which are principally sterling us dollar euro and swedish krona
the group hedges its foreign currency exposures on a seasonal basis that is winter and summer with each season comprising a sixmonth 
period at the start of a season the group will have hedged substantially all of its foreign currency exposure forecast sales and purchases  
and related assets and liabilities for that season using predominantly forward exchange contracts and option based instruments most with  
a maturity of less than one year from the reporting date
in respect of other monetary assets and liabilities denominated in foreign currencies the group ensures that its net exposure is kept to an 
acceptable level principally by using forward contracts in respect of nonsterling denominated airline maintenance provision balances loan 
balances and deposits
the group publishes its consolidated ﬁnancial statements in sterling and as a result it is also subject to foreign currency exchange translation 
risk in respect of the translation of the results and underlying net assets of its foreign operations into sterling
the following signiﬁcant exchange rates to the group’s sterling presentation currency excluding the impact of hedged transactions are 
illustrative of the rates applied during the current and prior year
   average rate midspot rate
    
     year ended year ended
     30 september 30 september 30 september 30 september
£1 gbp equivalent     2011 2010 2011 2010
us dollar     1573 1559 1558 1587
euro     1158 1152 1154 1163
swedish krona     10657 11307 10683 10631
as at 30 september 2011 the group has hedged forecast transactions for 39bn 2010 34bn and €16bn 2010 €15bn for periods up until 
winter 2012 principally relating to winter 2011 and summer 2012
24 capital and reserves continued
   other reserves
  
   convertible     equity non
  called up bonds merger translation hedging accumulated holders controlling
  share capital reserve reserve reserve reserve losses of parent interest total
 note £m £m £m £m £m £m £m £m £m
balance at 1 october 2010  
as previously reported  112 83 2490 301 19 995 1972 1 1973
adjustment in respect of magic life  
note 1bii  – – 31 9 – 19 3 – 3
balance at 1 october 2010 restated  112 83 2521 292 19 1014 1975 1 1976
proﬁt for the year  – – – – – 85 85 2 87
other comprehensive expense 
income for the year restated  – – – 3 56 112 59 3 56
total comprehensive expense 
income for the year restated  – – – 3 56 27 26 5 31
transactions with owners
sharebased payment  – – – – – 19 19 – 19
acquisition of shares by  
employee beneﬁt trust  – – – – – 7 7 – 7
dividends 9 – – – – – 122 122 2 124
capital increase in magic life  – – 2 – – – 2 – 2
disposals to noncontrolling interest  – – – 3 – 4 7 46 39
change in deferred tax rate on 
equity portion of convertible bond  – 2 – – – – 2 – 2
at 30 september 2011  112 85 2523 286 37 1155 1888 50 1938
please refer to note 1bii for a full explanation of the restatement
convertible bond reserve
the convertible bond reserve comprises the equity element of the convertible bonds and the related portion of the bonds’ issue costs see note 19 
the equity element is calculated in accordance with the accounting policy described in note 1eii and is presented net of deferred tax
other reserves
details of dividends to equity holders of the parent debited to equity in the year are set out in note 9
exchange gains or losses arising on the translation to the group’s reporting currency are recorded in the translation reserve the hedging 
reserve records the portion of the cumulative gains or losses on hedging instruments in cash ﬂow hedges that are determined as effective  
gains or losses arising on cash ﬂow hedges are initially recorded in the hedge reserve and are recycled to the consolidated income statement  
in accordance with the accounting policy in note 1f
the group also has a capital reserve of £01m at 30 september 2011 2010 £01m the capital reserve is nondistributable
noncontrolling interest
on acquisition of 60 of intrepid travel pty limited an amount of £46m is recognised within noncontrolling interest primarily representing  
the 40 of the group’s adventure business of before the transaction together with 40 of the intrepid group not within the group’s control 
together after the transaction the consideration for acquisition of £39m being the disposal of 40 of the group’s share of the above 
adventure businesses that it no longer owns is recognised directly in equity in accordance with ias 27 revised see note 13 for more details financial statements
notes to the consolidated ﬁnancial statements continued
financial statements
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122 tui travel plc annual report  accounts 2011 tui travel plc annual report  accounts 2011 123
group at a glance strategic overview business and ﬁnancial review governance financial statements shareholder information
e interest rate risk
the group has exposure to interest rate risk arising principally on sterling us dollar and euro ﬂoating interest rates that are attached to the 
group’s ﬂoating rate aircraft leases and ﬂoating rate bank loans and cash balances
the group does not account for any ﬁxed rate ﬁnancial liabilities at fair value through proﬁt and loss and the group does not have any interest 
rate swap derivative instruments
the group’s loans and borrowings are measured at amortised cost with the exception of the other ﬁnancial liabilities which are carried at fair value
       carrying carrying
       amount  amount
       30 september 30 september
    nominal    2011  2010 
financial instrument currency    interest rate  year of maturity  £m £m
convertible bonds sterling   4960 20142017 654 633
shareholder loan eur   43 2012 26 575
secured bank loans sterling   18 20132018 14 15
 eur   5058 20122017 2 2
 usd   na 2012 1 7
unsecured bank loans eur   1389 20112016 11 12
 usd   33 2014 2 –
      30 36
finance leases eur   2684 20112046 100 236
 usd   4590 20122015 29 29
 mad   5965 20142017 2 2
 aud   72 – 118 20122015 1 2
      132 269
loan notes sterling   1145 2012 – 1
 usd   6065 20112016 1 1
      1 2
amounts owed to related parties eur   59 2015 10 –
other ﬁnancial liabilities eur   050 20112014 45 38
total interestbearing liabilities      898 1553
analysed between
fixed rate instruments      714 921
variable rate instruments      184 632
      898 1553
the main movements between ﬁxed rate and variable rate instruments in 2011 are the repayment of the previous year’s shareholder loan which 
was a variable rate loan
f liquidity risk
liquidity risk is the risk that the group will not be able to meet its ﬁnancial obligations as they fall due the group’s approach is to ensure that it 
will have sufﬁcient liquidity to meet its liabilities when due under both normal and stressed circumstances
the group’s liquidity peaks in july and august during the european summer holiday season with the liquidity low point being in december and 
january to manage the liquidity position the group is able to draw cash advances under its existing bank facilities which principally comprise the 
following main sources of long term debt funding
• the external bank revolving syndicated credit facilities totalling £970m 2010 £1060m plus bonding and letter of credit facilities totalling £185m 
2010 £90m which all mature in june 2015 from these facilities £111m has been utilised for letter of credit purposes at 30 september 2011 
2010 £166m
• a £350m convertible bond due october 2014 issued in october 2009
• a £400m convertible bond due april 2017 issued in april 2010
the external bank revolving credit facility is used to manage the seasonality of the group’s cash ﬂows and liquidity cash positions liquidity and 
available facility headroom are monitored daily by the group treasury department
the board remains satisﬁed with the group’s funding and liquidity position fixed charges cover and the ratio of net debt to ebitda which the 
board believes to be the most useful measures of cash generation and gearing as well as being the main basis for covenants in the external 
credit facilities were met at the year end and throughout the year fixed charges cover is deﬁned as earnings before interest tax depreciation 
amortisation and operating lease rentals charge ebitdar divided by net interest plus operating lease rentals ebitda is deﬁned as earnings 
before interest tax depreciation and amortisation both covenants are measured on an ‘underlying basis’ as deﬁned in note 1biii
in respect of the delivery of new aircraft the group’s established strategy is to reﬁnance new aircraft in advance of their delivery dates and 
therefore the group does not forecast to use internal cash resources for new aircraft purchases details of aircraft purchase commitments  
at the year end are given in note 28
25 financial instruments continued
c commodity risk
fuel commodity risk arises from the group’s operation of aircraft
the group hedges its fuel commodity exposures on a seasonal basis being winter and summer with each season comprising a sixmonth 
period at the start of a season the group will have hedged substantially all of its fuel commodity exposure for that season using predominantly 
commodity swaps or options most with a maturity of less than one year from the reporting date
as at 30 september 2011 the group has hedged transactions for fuel of 18m metric tonnes 2010 17m metric tonnes for periods up until 
winter 2012
details of fuel forward derivative instruments are set out in note 25i
d credit risk
credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in ﬁnancial loss to the group credit risk arises 
from cash balances including bank deposits and cash and cash equivalents and derivative ﬁnancial instruments as well as credit exposures to 
customers including outstanding receivables ﬁnancial guarantees and committed transactions credit risk is managed separately for treasury 
and operating related credit exposures
the group minimises its ﬁnancial credit risk through the application of risk management policies approved and monitored by the board while 
counterparties are limited to major banks and ﬁnancial institutions group policy ensures that individual counterparty limits are adhered to and 
that there are no signiﬁcant concentrations of credit risk the group monitors the credit ratings of its counterparties where applicable as part 
of its ongoing assessment of its credit exposure financial instruments are only transacted with major ﬁnancial institutions with strong credit 
ratings of a1p1
loans and other receivables exposures are managed locally in the operating units where they arise and credit limits are set as deemed appropriate 
for the customer there is no material concentration of credit risk with respect to trade and other receivables as the group has a large number 
of internationally dispersed customers
the carrying amount of ﬁnancial assets represents the maximum credit exposure the maximum exposure to credit risk at the balance sheet 
date was
       restated  restated
      carrying value carrying value carrying value
      30 september 30 september 30 september
      2011 2010 2009
      £m £m £m
trade and other receivables      693 732 781
cash and cash equivalents note 17      902 1304 790
derivatives – contracts used for hedging note 25i     215 165 284
trade and listed investments note 12      51 56 47
other investments note 17      22 5 40
total      1883 2262 1942
please refer to note 1bii for a full explanation of the restatement
the maximum exposure to credit risk for total trade and other receivables at the balance sheet date and by geographic region as well as their 
ageing is disclosed in note 16 trade and other receivables are shown net of provision for bad and doubtful debts of £58m 2010 £55m 2009 £59m
cash cash equivalents and other investments principally comprise money market deposits and other short term investments the investments 
are with counterparties with a strong credit rating of a1p1 at 30 september 2011 approximately 31 2010 33 of the group’s unrestricted 
cash and cash equivalents were invested with counterparties based in the united kingdom and 53 2010 26 were based with counterparties 
based in the republic of ireland there was nil 2010 33 on deposit with tui ag the ultimate parent company of the group
trade and other receivables exclude prepaid accommodation and other prepayments which do not meet the deﬁnition of a ﬁnancial instrument 
prepayments for hotel accommodation whilst not meeting the deﬁnition of a ﬁnancial asset under ias 39 give rise to a risk similar to credit  
risk due to the inherent risk of the group not recovering the prepayment through full delivery of the related goods and services from time  
to time prepayments can concentrate risk with speciﬁc counterparties which are based overseas the carrying amount of prepayments which 
are presented within current and noncurrent assets forms the maximum credit exposure before taking into account any security or collateral 
held by the group where appropriate the group obtains security collateral over the related accommodation property to mitigate credit risk  
at 30 september 2011 prepaid accommodation which is recoverable after more than one year was £140m 2010 £115m 2009 £151m financial statements
notes to the consolidated ﬁnancial statements continued
financial statements
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group at a glance strategic overview business and ﬁnancial review governance financial statements shareholder information
undrawn facilities throughout all years presented are analysed as follows
       30 september 30 september
       2011 2010
       £m £m
expiring
within one year       – 1
in more than one year but less than ﬁve years       1044 983
total       1044 984
g analysis of total ﬁnancial assets and ﬁnancial liabilities
the tables below set out the group’s ias 39 classiﬁcation for each of its ﬁnancial assets and liabilities
   financial  derivative
   assets and  ﬁnancial
   liabilities at fair  instruments   financial
   value through  used in hedge available for sale loans and liabilities at total
   proﬁt and loss accounting ﬁnancial assets receivables amortised cost carrying value
at 30 september 2011   £m £m £m £m £m £m
cash and cash equivalents   – – – 902 – 902
borrowings due within one year   39 – – – 57 96
borrowings due after more than one year   – – – – 802 802
derivative assets   42 173 – – – 215
derivative liabilities   61 90 – – – 151
other ﬁnancial assets   30 – 22 715 – 767
other ﬁnancial liabilities   4 – – – 2191 2195
total   32 83 22 1617 3050 1360
   financial  derivative
   assets and  ﬁnancial
   liabilities at fair  instruments   financial restated
   value through  used in hedge available for sale loans and liabilities at total
   proﬁt and loss accounting ﬁnancial assets receivables amortised cost carrying value
at 30 september 2010   £m £m £m £m £m £m
cash and cash equivalents   – – – 1304 – 1304
borrowings due within one year   38 – – – 719 757
borrowings due after more than one year   – – – – 796 796
derivative assets   10 155 – – – 165
derivative liabilities   12 133 – – – 145
other ﬁnancial assets restated   30 – 27 737 – 794
other ﬁnancial liabilities restated   21 – – – 2691 2712
total restated   31 22 27 2041 4206 2147
other ﬁnancial assets and other ﬁnancial liabilities have been restated as described in note 1bii
other ﬁnancial assets comprise trade receivables other receivables which are receivable within and after more than one year as well as other 
investments due within one year other ﬁnancial liabilities comprise trade payables accruals and other ﬁnancial liabilities which are payable 
within and after more than one year
interest payable on ﬁnancial instruments carried at amortised cost comprising bank loans loans from parent and ﬁnance lease liabilities is 
disclosed in note 5
derivatives presented under held for trading under ias 39 classiﬁcations are analysed between cash ﬂow hedges and economic hedges in note 25i
25 financial instruments continued
the following are the undiscounted contractual cash ﬂows of ﬁnancial liabilities including interest payments calculated using interest rates in 
force at each balance sheet date
      between  between
   carrying  contractual within one and two and more than
   amount cash ﬂows one year two years  ﬁve years ﬁve years
30 september 2011    £m £m £m £m £m £m
nonderivative ﬁnancial liabilities
convertible bonds   654 941 41 41 440 419
shareholder loan   26 27 27 – – –
secured bank loans   17 18 3 3 12 –
unsecured bank loans   13 14 8 3 3 –
finance leases   132 164 24 26 58 56
loan notes   1 1 1 – – –
related parties   10 11 – – 11 –
other ﬁnancial liabilities   47 48 48 – – –
trade and other payables   2191 2191 2178 13 – –
derivative ﬁnancial liabilities
contracts used for hedging   151 127 116 11 – –
total   3242 3542 2446 97 524 475
      between  between
   carrying  contractual within one and two and more than
   amount cash ﬂows one year two years  ﬁve years ﬁve years
30 september 2010    £m £m £m £m £m £m
nonderivative ﬁnancial liabilities
convertible bonds   633 982 41 41 461 439
shareholder loan   575 580 580 – – –
secured bank loans   24 26 10 2 14 –
unsecured bank loans   12 13 9 2 2 –
finance leases   269 311 154 21 71 65
loan notes   2 3 2 1 – –
other ﬁnancial liabilities   38 38 38 – – –
trade and other payables restated   2712 2712 2664 48 – –
derivative ﬁnancial liabilities
contracts used for hedging   145 146 119 27 – –
total restated   4410 4811 3617 142 548 504
      between  between
   carrying  contractual within one and two and more than
   amount cash ﬂows one year two years  ﬁve years ﬁve years
30 september 2009    £m £m £m £m £m £m
nonderivative ﬁnancial liabilities
shareholder loan   840 865 249 616 – –
secured bank loans   29 31 6 10 15 –
unsecured bank loans   22 27 15 3 6 3
finance leases   192 206 33 147 23 3
loan notes   6 7 5 1 1 –
other ﬁnancial liabilities   39 39 39 – – –
trade and other payables restated   2951 2951 2920 31 – –
derivative ﬁnancial liabilities
contracts used for hedging   302 348 307 38 3 –
total restated   4381 4474 3574 846 48 6
please refer to note 1bii for a full explanation of the restatement
the actual repayment of revolving credit facilities will vary the timing reﬂected in the tables is based on the ﬁrst date that the group can be 
required to settle the liability
trade and other payables exclude customers’ monies received in advance deferred income contingent consideration and other noncontractual 
payables
at 30 september 2011 the group had available undrawn committed borrowing facilities of £1044m 2010 £984m comprising letters of credit 
guarantees and revolving ﬂoating rate credit facilities for cash borrowings any noncompliance with covenants underlying the group’s ﬁnancing 
arrangements could if not waived constitute an event of default with respect to any such arrangements the group was in full compliance with 
its ﬁnancial covenants throughout each of the periods presented financial statements
notes to the consolidated ﬁnancial statements continued
financial statements
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group at a glance strategic overview business and ﬁnancial review governance financial statements shareholder information
the group’s ﬁnancial assets and liabilities excluding ﬁnance lease liabilities measured at fair value at 30 september 2011 are categorised as follows
        total
     level 1 level 2 level 3  fair value
at 30 september 2011      £m £m £m £m
assets
trade and listed investments     14 – 37 51
derivative ﬁnancial instruments     – 215 – 215
total assets     14 215 37 266
liabilities
derivative ﬁnancial instruments     – 151 – 151
other ﬁnancial liabilities     – – 43 43
total liabilities     – 151 43 194
total     14 64 6 72
        total
     level 1 level 2 level 3  fair value
at 30 september 2010      £m £m £m £m
assets
trade and listed investments     19 – 37 56
derivative ﬁnancial instruments     – 165 – 165
total assets     19 165 37 221
liabilities
derivative ﬁnancial instruments     – 145 – 145
other ﬁnancial liabilities     – – 59 59
total liabilities     – 145 59 204
total     19 20 22 17
the movements in level 3 instruments measured on a recurring basis for the year ended 30 september 2011 are as follows
      trade other total
      and listed ﬁnancial level 3
      investments liabilities instruments
      £m £m £m
at 30 september 2010      37 59 22
cash settlement of deferred consideration      – 11 11
adjustment of deferred consideration through goodwill     – 5 5
at 30 september 2011      37 43 6
trade and listed investments
as at 30 september 2011 £37m 2010 £37m of trade and listed investments were categorised as level 3 instruments these consist of the 
group’s investment in the airline group limited £30m and other trade investments in the equity of unlisted companies £7m both are valued 
using assumptions not observable in the market and so have been categorised as level 3 instruments in the fair value hierarchy see note 12
the level 1 trade investment is the group’s holding in air berlin plc see note 12
derivative assets and liabilities
derivatives are valued in the market using discounted cash ﬂow techniques
these techniques incorporate inputs at levels 1 and 2 such as interest rates and foreign currency exchange rates these market inputs are used 
in the discounted cash ﬂow calculation incorporating the instrument’s term notional amount and discount rate and taking credit risk into account
as signiﬁcant inputs to the valuation are observable in the markets these instruments are categorised as level 2 in the hierarchy
other ﬁnancial liabilities
the put option to acquire the remaining equity stake in l’tur tourismus ag £39m is classiﬁed as an other ﬁnancial liability with changes in fair 
value included in operating proﬁt deferred consideration £4m is also measured at fair value based on the relevant contracts as all of these 
ﬁnancial liabilities are valued using assumptions not observable in the market they are categorised as level 3 instruments in the fair value hierarchy
there are no reasonably possible changes in assumptions which would materially alter the value of these level 3 ﬁnancial instruments
25 financial instruments continued
h fair values of ﬁnancial assets and ﬁnancial liabilities
the fair values of ﬁnancial assets and liabilities together with carrying amounts shown in the consolidated balance sheet at 30 september 2011 
and at 30 september 2010 are as follows
   30 september 2011 30 september 2010
    
       restated restated
     carrying fair carrying fair
     amount value amount value
     £m £m £m £m
cash and cash equivalents     902 902 1304 1304
borrowings
convertible bond     654 544 633 705
shareholder loan     26 26 575 575
bank loans     30 30 36 36
loan notes     1 1 2 2
finance lease liabilities     132 131 269 271
other ﬁnancial liabilities     55 55 38 38
derivative ﬁnancial instruments
forward exchange contracts used for hedging
– assets     161 161 153 153
– liabilities     100 100 127 127
commodity contracts used for hedging
– assets     54 54 12 12
– liabilities     51 51 18 18
other ﬁnancial assets
trade and other receivables     693 693 732 732
trade and listed investments     51 51 56 56
other investments     22 22 5 5
other ﬁnancial liabilities
current trade and other payables     2180 2180 2664 2664
noncurrent trade and other payables     15 15 48 48
total     1361 1250 2148 2222
please refer to note 1bii for a full explanation of the restatement
the basis for fair value measurement of ﬁnancial assets and liabilities is set out in note 1w to the consolidated ﬁnancial statements
fair value measurements
ifrs 7 requires enhanced disclosures about fair value measurements of ﬁnancial instruments through the use of a threelevel fair value 
hierarchy that prioritises the valuation techniques used in fair value calculations
the levels can be broadly described as follows
• level 1 – use of unadjusted quoted prices in active markets for identical assets or liabilities
• level 2 – use of observable inputs other than quoted prices included within level 1 such as quoted prices for similar assets or liabilities in 
active markets
• level 3 – use of inputs not based on observable market data but reﬂecting management’s own assumptions about pricing the asset or liability
the group maintains policies and procedures to value instruments using the most relevant data available if there are multiple inputs available 
that fall into different levels of the hierarchy the instrument is categorised on the basis of the lowest level input financial statements
notes to the consolidated ﬁnancial statements continued
financial statements
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128 tui travel plc annual report  accounts 2011 tui travel plc annual report  accounts 2011 129
group at a glance strategic overview business and ﬁnancial review governance financial statements shareholder information
ineffectiveness
ineffectiveness in respect of cash ﬂow hedges has been recognised in the consolidated income statement for the year ended 30 september 2011 
ineffectiveness for the year ended 30 september 2011 comprised a credit of £1m 2010 credit £2m relating to fuel hedging and this is included 
within underlying operating proﬁt there is no ineffectiveness required to be included in proﬁt or loss that arises from hedges of net investments 
in foreign operations
j amounts recognised directly in equity
the following amounts have been recognised directly in equity during the year
       year ended year ended
       30 september 30 september
       2011 2010
       £m £m
hedging reserve
effective portion of changes in fair value of cash ﬂow hedging instruments     85 33
fair value of cash ﬂow hedges transferred to the consolidated income statement    4 41
       81 74
deferred tax on the above items recognised outside of the consolidated income statement is shown in note 8iii
k capital management
the board’s policy has been to maintain a strong capital base in order to maintain investor creditor and market conﬁdence and to sustain future 
development of the business the group has a roadmap to deliver sustainable long term value to shareholders with a roic greater than the 
group’s pretax weighted average cost of capital progress in achieving this objective has been made during this year by improving cash and 
underlying operating proﬁt which increases roic to 113 2010 restated 97
roic is deﬁned as ‘underlying nopat’‘average invested capital’
underlying nopat is underlying net operating proﬁt after a tax charge at the effective annual rate
‘underlying’ as a measure of operating proﬁt is deﬁned in note 1biii
average invested capital comprises an average of the net assets at the start and end of the year of the group adjusted to add back net debt 
cumulative goodwill impairment charges and deﬁned beneﬁt pension scheme net deﬁcits there is also an adjustment to adjust net debt to 
reﬂect a seasonal average cash balance calculations for the current and prior years are
        restated
       year ended year ended
       30 september 30 september
       2011 2010
    note   £m £m
underlying operating proﬁt    consolidated income statement 471 399
impact of the volcanic disruption     – 35
underlying operating proﬁt excluding impact of volcanic disruption   471 434
taxation at the underlying effective rate of 27 2010 27    127 117
underlying nopat     344 317
net assets    consolidated balance sheet 1938 1976
net cashdebt    26 4 249
seasonal net debt adjustment     300 300
cumulative goodwill impairment charge 2011 france £39m 2010 spain  
£5m and italy £7m 2009 sunsail clubs £7m 2008 tuifly £112m  10 170 131
deﬁned beneﬁt pension net deﬁcit    6c 513 493
invested capital     2917 3149
average invested capital     3033 3279
roic     113 97
pro forma unaudited underlying cost
the board seeks to maintain a balance between the levels of debt borrowings undertaken and the advantages and security afforded by a sound 
capital position an analysis of net debt at the year end is in note 26
certain subsidiaries have external capital requirements as a result of applicable travel industry regulations in their jurisdictions compliance  
with these regulations is mandatory for the relevant operating businesses in those countries in order that they are able to continue trading  
key countries with such mandatory capital requirements are france belgium the netherlands germany and australia the capital requirements 
in these countries stipulate maintaining minimum equitynet asset levels in operating subsidiaries all such capital requirements were complied 
with as at 30 september 2011 none of these requirements are individually or collectively signiﬁcant to the overall group and do not place any 
signiﬁcant restriction on the group’s funding or operations
2010 comparatives for underlying operating proﬁt underlying nopat net assets invested capital average invested capital and roic have been 
restated following the restatement disclosed in note 1bii prior to this restatement in 2010 roic was 99
25 financial instruments continued
i derivative instruments
at the balance sheet date the fair value of the group’s derivative ﬁnancial assets and liabilities was as follows
  30 september 2011 30 september 2010
   
   assets liabilities total assets liabilities total
   fair value fair value fair value fair value fair value fair value
   £m £m £m £m £m £m
cash ﬂow hedges
foreign exchange forwards   119 39 80 80 101 21
foreign exchange options   – – – 3 2 1
commodity options   3 8 5 1 – 1
commodity swaps   51 43 8 11 18 7
   173 90 83 95 121 26
derivatives not hedge accounted
foreign exchange forwards   42 61 19 60 12 48
held at fair value in proﬁt and loss   – – – 10 12 2
   42 61 19 70 24 46
total   215 151 64 165 145 20
analysed as
current   185 133 52 144 122 22
noncurrent   30 18 12 21 23 2
total   215 151 64 165 145 20
the group has hedged a proportion of its currency requirements for the winter 2011 and summer 2012 seasons using collecting forward option 
instruments which are carried at fair value through proﬁt and loss all other derivatives are held as cash ﬂow hedges or to offset changes in the 
value of items recognised in the consolidated balance sheet speculative positions are not undertaken
the following table indicates the periods in which the cash ﬂows associated with derivatives are expected to occur future cash ﬂows have been 
estimated based on spot rates and prices at 30 september 2011 the net cash ﬂows are shown net for each instrument
    projected cash ﬂows
  
      between between
     less than one and two and  over
     one year two years ﬁve years ﬁve years
30 september 2011     £m £m £m £m
derivative ﬁnancial assets
foreign exchange forwards     129 22 1 –
foreign exchange options     – – – –
commodity swaps     50 3 – –
     179 25 1 –
derivative ﬁnancial liabilities
foreign exchange forwards     86 2 – –
commodity options     3 – – –
commodity swaps     27 9 – –
     116 11 – –
total     63 14 1 –
    projected cash ﬂows
  
      between between
     less than one and two and  over
     one year two years ﬁve years ﬁve years
30 september 2010     £m £m £m £m
derivative ﬁnancial assets
foreign exchange forwards     132 16 2 –
foreign exchange options     2 – – –
commodity swaps     8 – – –
     142 16 2 –
derivative ﬁnancial liabilities
foreign exchange forwards     99 20 – –
commodity options     1 – – –
commodity swaps     19 7 – –
     119 27 – –
total     23 11 2 – financial statements
notes to the consolidated ﬁnancial statements continued
financial statements
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130 tui travel plc annual report  accounts 2011 tui travel plc annual report  accounts 2011 131
group at a glance strategic overview business and ﬁnancial review governance financial statements shareholder information
26 movements in cash and net debt
 cash  amounts due    other
 and cash  convertible to related bank loan finance ﬁnancial
 equivalents bonds parties loans notes leases liabilities total
 £m £m £m £m £m £m £m £m
at 1 october 2009 790 – 840 51 6 192 39 338
cash movement 561 750 222 13 4 31 – 81
noncash movement – 117 – – – 121 – 4
foreign exchange 47 – 43 2 – 13 1 12
at 30 september 2010 1304 633 575 36 2 269 38 249
cash movement 406 – 530 5 1 145 6 269
noncash movement – 21 – – – 7 1 29
foreign exchange 4 – 9 1 – 1 – 13
at 30 september 2011 902 654 36 30 1 132 45 4
the 2011 noncash movement of £21m in convertible bonds relates to the accretion of the equity portion of the convertible bonds the 2010 
noncash movements relate to the inception of new ﬁnance leases arising on capital expenditure and the equity portion on issuance of the 
convertible bonds
the group also acquired 40 of intrepid travel pty limited for total consideration of £39m which was a noncash transaction further details 
of this transaction is given in note 13
27 operating lease commitments
total group obligations under noncancellable operating lease contracts are payable as follows
      aircraft ships  aircraft ships
     land and yachts and land and yachts and
     buildings equipment buildings equipment
     30 september 30 september 30 september 30 september
     2011 2011 2010 2010
     £m £m £m £m
total commitments under noncancellable operating leases expiring
within one year     355 378 226 369
between one and ﬁve years     548 847 512 728
later than ﬁve years     243 194 245 107
total     1146 1419 983 1204
operating lease commitments in respect of land and buildings comprise commitments in respect of the group’s retail estate its hotel estate 
including those commitments that are required to be disclosed as leases under ifric 4 and its ofﬁce premises
the future commitment under the group’s ﬂoating rate aircraft operating leases at 30 september 2011 was £108m 2010 £122m
in total the group operates 137 aircraft on operating leases at 30 september 2011 2010 122 aircraft a minority of which contain purchase 
options yachts are held on operating leases in tui marine as part of the group’s sunsail and the moorings ﬂeets cruise ships are held on 
operating leases in the uk source market
28 capital commitments
the group’s capital commitments are as follows
       30 september 30 september
       2011 2010
       £m £m
contracted but not provided for
property plant and equipment       1 5
intangible assets       1 4
total       2 9
in addition to the above items at the year end the group had contracted to purchase 40 2010 40 aircraft with initial deliveries to start in the 
last quarter of the calendar year 2011 at list price the total order value was us4634m 2010 us4439m before escalations and discounts
the group intends to ﬁnance these aircraft in advance of their delivery dates and therefore does not expect to use its own cash resources for 
their purchase
the group’s joint ventures and associates had no material capital commitments at 30 september 2011 2010 £nil
29 contingent liabilities
the group is at any time defending a number of actions against it arising in the normal course of business provision is made for these actions 
where this is deemed appropriate no actions which are outstanding at 30 september 2011 are expected to have a material effect on these 
accounts the directors consider that adequate provision has been made for all known liabilities
25 financial instruments continued
l sensitivity analysis
the sensitivity analysis is for illustrative purposes only and should not be considered a projection of likely future events and gains or losses
the sensitivity analysis includes the following assumptions
• changes in market interest rates only affect interest income or expense of variable ﬁnancial instruments
• changes in market interest rates only affect interest income or expense in relation to ﬁnancial instruments with ﬁxed interest rates if these 
are recognised at fair value
• changes in market interest currency and fuel rates affect the fair value of derivative ﬁnancial instruments designated as hedging instruments 
and the majority of hedges are expected to be highly effective with the main exception being collecting fx forward contracts not qualifying 
for hedge accounting
• changes in the fair value of derivative ﬁnancial instruments and other ﬁnancial assets or liabilities are estimated by discounting the future 
cash ﬂows to net present values using appropriate market rates prevailing at the year end
the group has used a sensitivity analysis technique that measures the estimated change to the consolidated income statement and equity of a 
1 100 basis points difference in market interest rates or a 10 strengthening or weakening in sterling against all other currencies and in fuel 
prices from the rates applicable at the balance sheet date with all other variables remaining constant these being considered to be reasonably 
possible changes to interest rates sterling rates and fuel prices
interest rate risk
under the above assumptions a 100 basis points increase in interest rates would result in an immaterial increase in interest expense in the 
consolidated income statement or equity 2010 £5m increase a 100 basis points reduction in interest rates is not considered reasonably possible
currency risk
similarly under the above assumptions a 10 strengthening or weakening of sterling against all principal exchange rates would have reduced 
proﬁt before tax by £6m 2010 loss unaltered or increased it by £8m 2010 loss unaltered respectively principally relating to the translation 
of the income statements of overseas subsidiaries equity before tax would have decreased by £217m 2010 £210m or increased by £265m 
2010 £215m respectively
fuel price risk
the sensitivity analysis is based on a 10 increase or decrease in fuel prices and the sensitivity will differ correspondingly if the fuel markets are 
more or less volatile under these assumptions with a 10 increase or decrease in the unit price of fuel proﬁt before tax would neither increase 
nor decrease materially because of the fuel price hedging policy and appropriate pricing adjustments equity before tax would increase by 
£105m 2010 £79m or decrease by £109m 2010 £78m respectively
m litigation risk
the group has a policy to mitigate the ﬁnancial risk of litigation and disaster through insurance with third party providers and the use of captive insurance 
companies the group’s exposure to risk is capped by single event and aggregate limits with insurance in place for exposures above these limits
the group provides for outstanding claims including settlement expenses using a consistent methodology based upon historical claims 
patterns average claims amounts external legal advice and future expectations
n cash conversion
the group targets conversion of underlying proﬁt before tax to free cash ﬂow of at least 70 ‘underlying’ as a measure of operating proﬁt is deﬁned 
in note 1biii ‘free cash ﬂow’ is deﬁned as the movement in cash net of debt during the year as set out in note 26 before dividend payments 
acquisitions and business disposal proceeds and acquisitions of shares for sharebased payments calculations for the current and prior year are
        restated
       year ended year ended
       30 september 30 september
       2011 2010
    note   £m £m
underlying operating proﬁt    consolidated income statement 471 399
impact of the volcanic disruption     – 35
underlying operating proﬁt excluding impact of volcanic disruption   471 434
net ﬁnancial expense    5 111 117
separately disclosed items – ﬁnancial expenses    4 – 7
underlying proﬁt before tax excluding impact of volcanic disruption   360 324
movement in cash net of debt    26 269 81
add
dividends paid to ordinary and noncontrolling interests   consolidated statement of cash ﬂows 124 120
acquisition of subsidiaries net of cash acquired    consolidated statement of cash ﬂows 33 51
investment in joint ventures associates and other investments   consolidated statement of cash ﬂows 18 90
proceeds from disposal of associated undertakings net of cash disposed of  consolidated statement of cash ﬂows – 1
proceeds from other investments    consolidated statement of cash ﬂows – 9
shares purchased by employee beneﬁt trust    consolidated statement of cash ﬂows 7 7
free cash ﬂow     451 339
cash conversion     125 105
pro forma unaudited underlying cost financial statements
notes to the consolidated ﬁnancial statements continued
financial statements
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132 tui travel plc annual report  accounts 2011 tui travel plc annual report  accounts 2011 133
group at a glance strategic overview business and ﬁnancial review governance financial statements shareholder information
payables outstanding with related parties are reported in notes 19 and 20 and receivables outstanding are reported in note 16 included within 
the amount payable to tui ag of £45m 2010 £594m is a shareholder loan of £26m 2010 £575m included within the amount payable to joint 
ventures and associates of the group of £28m 2010 £10m is a loan to a joint venture of £10m 2010 £nil the £385m receivable balance 
outstanding from the ultimate parent tui ag at 30 september 2010 included a £370m cash deposit which was used in the year as part of 
settling the prior year shareholder loan from tui ag
details regarding the investment in sunwing travel group limited and togebi holdings limited are included in note 12 details on interest rate 
and liquidity risks in respect of balances with related parties are included in notes 25e and 25f respectively
in accordance with ias 24 key management functions within the group the gmb and the directors of the company were related parties whose 
remuneration had to be listed separately the compensation paid in respect of key management personnel including directors was as follows
       year ended year ended
       30 september 30 september
       2011 2010
       £m £m
short term employee beneﬁts       9 15
postretirement beneﬁts       2 2
sharebased payments       10 9
total       21 26
details of directors’ remuneration are given in the remuneration report
31 principal operating subsidiaries
other than as stated below all the principal operating subsidiaries listed are wholly owned principal operating subsidiaries are those which  
in the opinion of the directors signiﬁcantly affected the sector’s results and net assets during the year the directors consider that those 
companies not listed are not signiﬁcant in relation to the sector speciﬁed tui uk limited is presented within the mainstream sector northern 
region to reﬂect its principal operations but the company also includes certain uk specialist  activity businesses at 30 september 2011
subsidiary country nature of business
mainstream sector
mainstream – northern region
falcon leisure group overseas limited united kingdom tour operator
fritidsresor ab sweden tour operator
oy finnmatkat ab finland tour operator
star tour as denmark tour operator
startourstjernereiser as norway tour operator
thomson airways limited united kingdom airline
tui canada holdings inc holding co of sunwing travel group inc canada holding company
tui uk limited united kingdom tour operator
tui uk retail limited united kingdom travel agent
tuiﬂy nordic ab sweden airline
mainstream – central europe
berge  meer touristik gmbh germany tour operator
l’tur tourismus ag 700 germany tour operator
tui suisse ag switzerland tour operator
tui austria holding gmbh austria tour operator
tui aviation gmbh germany leasing company
tui deutschland gmbh germany tour operator
tui leisure travel gmbh germany travel agent
tui österreich gmbh austria tour operator
tui poland sp zoo poland tour operator
tuiﬂy gmbh germany airline
mainstream – western europe
corsair sa france airline
groupe marmara sas france tour operator
jetair nv belgium tour operator
société d’investissement aérien sa morocco airline
tui airlines belgium nv belgium airline
tui airlines nederland bv netherlands airline
tui travel belgium nv belgium tour operator
tui nederland nv netherlands tour operator
voyages touraventure sa france tour operator
30 related party transactions
apart from with its own subsidiaries which are included in the consolidated ﬁnancial statements tui travel plc in carrying out its ordinary 
business activities maintained direct and indirect relationships with related parties including consolidated or related companies of its ultimate 
parent company tui ag these companies delivered services to companies in the group
the group also undertook transactions with its joint ventures and associated companies these transactions related primarily to incoming 
agencies and hotel companies used by the group’s tour operators the income and expenses arising from transactions with associates and  
joint ventures are included within the appropriate sector revenue or costs as presented in the segmental analysis
all transactions with related parties were executed on an arm’s length basis and under normal conditions of trade with independent third parties
shareholder loan
a shareholder loan was advanced to the company by tui ag on 3 september 2007 the loan bore interest at euribor plus a margin of 19 
per annum the company could make voluntary repayments at any time during the term of the loan subject to a minimum repayment of €10m 
and the giving of 30 days’ notice the loan was repaid during the year and had a drawn balance of €nil at 30 september 2011 30 september 
2010 €669m not including accrued interest payable
a further shareholder loan was advanced to the company by tui ag on 13 july 2011 in respect of acquiring magic life the loan bears interest 
at euribor plus a margin of 275 per annum the company can make voluntary repayments at any time during the term of the loan subject 
to a minimum repayment of €1m and the giving of 10 days’ notice the drawn balance of the loan at 30 september 2011 was €30m not including 
accrued interest payable it is repayable in two instalments 30 april 2012 €20m and 31 august 2012 €10m
hotel framework agreement
as part of the relationship arrangements between the company and tui ag at the time of the business combination both parties entered into 
the hotel framework agreement which governed the commercial relationship between tui ag and the company in respect of the distribution 
of hotel beds forming part of the hotel portfolio interests retained by tui ag under the hotel framework agreement tui deutschland tui 
travel plc’s german tour operating business continued to have access to the robinson hotel portfolio and to the distribution of such portfolio’s 
hotel beds in europe the original hotel framework agreement expired on 31 october 2011 and a new agreement has been negotiated which 
sets the room rates tui deutschland is charged by robinson these rates have been set at current market rates but the contract does not 
contain any commitment from tui deutschland
trademark licence agreement
the trademark licence agreement incorporates trademark licences granted from tui ag to members of the tui tourism group in relation to 
tui tourism’s use of the tui name and logo and other trademarks from within tui ag’s portfolio of trademarks used in the former tui tourism’s 
business licence fees payable under each licence are an annual fee equal to 002 of the average annual gross turnover of the relevant licensee 
under the relevant trademarks measured over a threeyear period total licence fees charged for the year ended 30 september 2011 were £3m 
2010 £3m each licence’s standard terms are for ﬁve years with an option for the relevant licensee to extend for a further ﬁve years on the 
same terms
details of transactions with related parties and balances outstanding at the balance sheet date are set out in the tables below
   revenue expenses
    
        restated
     year ended year ended year ended year ended
     30 september 30 september 30 september 30 september
     2011 2010 2011 2010
     £m £m £m £m
related party
ultimate parent tui ag     6 11 34 70
hotel and resort subsidiaries of tui ag     11 13 319 423
other subsidiaries joint ventures and associates of tui ag    10 7 74 98
joint ventures and associates of the group     42 10 114 120
total     69 41 541 711
   receivables outstanding payables outstanding
    
        restated
     year ended year ended year ended year ended
     30 september 30 september 30 september 30 september
     2011 2010 2011 2010
     £m £m £m £m
related party
ultimate parent tui ag     5 385 45 594
hotel and resort subsidiaries of tui ag     – 4 37 66
other subsidiaries joint ventures and associates of tui ag    9 4 15 12
joint ventures and associates of the group     34 31 28 10
total     48 424 125 682 financial statements
notes to the consolidated ﬁnancial statements continued
financial statements
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134 tui travel plc annual report  accounts 2011 tui travel plc annual report  accounts 2011 135
group at a glance strategic overview business and ﬁnancial review governance financial statements shareholder information
32 earningsloss per share
the basic earningsloss per share is calculated by dividing the result attributable to ordinary shareholders by the applicable weighted average 
number of shares in issue during the year excluding those held in the employee beneﬁt trusts the diluted earningsloss per share is calculated 
on the result attributable to ordinary shareholders divided by the adjusted potential weighted average number of ordinary shares which takes 
account of the outstanding share awards and the impact of the conversion of the convertible bonds where their conversion is dilutive the 
additional underlying earnings per share measures have been presented to provide the reader of the accounts with a better understanding  
of the results
basic and diluted earningsloss per share is as follows
     weighted   weighted
    average number earnings  average number restated loss
   earnings of shares per share restated loss of shares per share
   2011 2011  2011 2010 2010 2010
   £m millions pence £m millions pence
basic earningsloss per share   85 1107 77 123 1107 111
        
effect of dilutive options   – 11  – –
diluted earningsloss per share   85 1118 76 123 1107 111
the 2010 loss per share basic and diluted ﬁgures have been restated as described in note 1bii the impact of the restatement on basic and 
diluted loss per share is to increase the loss by 16p in respect of the representation of jet4you and by 17p for the inclusion of magic life under 
predecessor accounting the total of 33p increases the restated loss basic and diluted per share from 78p to 111p
for the 2010 statutory measure of diluted loss per share the effects of the options and the convertible bonds are antidilutive the antidilutive 
effect is not included in the calculation and the restated basic loss per share and restated diluted loss per share are therefore both disclosed as 
111p had these been taken into account in 2010 the fully diluted weighted average number of shares on a statutory basis would have been 
1262 million
for the 2011 statutory measure of diluted earnings per share the effects of including the convertible bonds only are antidilutive and therefore 
this is not included within the calculation had this been taken into account in 2011 the fully diluted weighted average number of shares on a 
statutory basis would have been 1323 million
alternative measures of earningsloss per share
     weighted   weighted restated
    average number earnings restated average number lossearnings
   earnings of shares per share lossearnings of shares per share
   loss 2011  2011 2010 2010 2010
   £m millions pence £m millions pence
basic and diluted earningsloss per share   85 1107 77 123 1107 111
acquisition related expenses and impairment of goodwill  121 –  75 –
predecessor accounting for magic life   17 –  19 –
separately disclosed items   74 –  262 –
tax base difference   36 –  23 –
basic underlying earnings per share   261 1107 236 210 1107 190
effect of dilutive options   – 11  – 11
effect of convertible bond net of tax   45 205  32 144
diluted underlying earnings per share   306 1323 231 242 1262 192
the tax base difference primarily represents the difference between the actual charge in the consolidated income statement and the group’s 
underlying tax charge as disclosed in note 8 the dilutive effect of the convertible bonds is included solely to calculate diluted underlying 
earnings per share
the 2010 underlying loss per share basic and diluted ﬁgures have been restated as described in note 1bii to include the impact of volcanic 
ash in the calculation
reconciliation of proﬁtloss for the year from continuing operations attributable  
to ordinary shareholders from continuing operations
        restated
       year ended year ended
       30 september 30 september
       2011 2010
       £m £m
proﬁtloss attributable to ordinary shareholders from continuing operations     85 123
result attributable to noncontrolling interests from continuing operations     2 –
proﬁtloss for the year from continuing operations      87 123
2010 numbers have been restated as described in note 1bii
31 principal operating subsidiaries continued
subsidiary country nature of business
accommodation  destinations sector
acampora travel srl 51 italy destination services
asiarooms pte ltd singapore online accommodation
beds on line slu spain online accommodation
club turavia sa de cv mexico accommodation wholesaler
gateway guest services usa llc usa cruise handling
hotelbeds dominicana sa dominican republic accommodation wholesaler
hotelbeds slu spain accommodation wholesaler
hotelbeds spain slu spain accommodation wholesaler
hotelbeds product slu spain online accommodation
hotelbeds uk limited united kingdom accommodation wholesaler
hotelbeds usa inc usa accommodation wholesaler
intercruises shoreside  port services inc usa cruise handling
intercruises shoreside  port services slu spain cruise handling
late rooms limited united kingdom late accommodation
tantur turizm seyahat anonim sirketi turkey destination services
transfaragencia de viagens e turismo unipessoal lda portugal destination services
tui hellas travel tourism and airlines ae greece destination services
tui portugalagencia de viagens e turismo sa portugal destination services
tui españa turismo sa 990 spain destination services
ultramar express transport sa spain destination services
specialist  activity sector
adventure tours australia group pty ltd 60 australia tour operator
brightspark travel inc usa tour operator
crown travel limited united kingdom tour operator
eac language centres uk limited united kingdom language teaching
exodus travels limited 60 united kingdom tour operator
fanﬁrm pty limited australia tour operator
first choice sailing inc usa tour operator
gullivers sports travel limited united kingdom tour operator
hampstead school of english limited united kingdom language teaching
hayes  jarvis travel limited united kingdom tour operator
intrepid travel pty ltd 60 australia tour operator
mariner international travel inc usa tour operator
peregrine adventures pty ltd australia tour operator
porter and haylett limited united kingdom boat owning company
quark expeditions inc usa tour operator
real travel limited united kingdom tour operator
ski bound limited united kingdom tour operator
specialist holiday group ireland limited irish republic tour operator
specialist holidays travel limited united kingdom tour operator
sportsworld group limited united kingdom tour operator
studentcitycom inc usa tour operator
sunsail limited united kingdom tour operator
sunsail worldwide sailing limited united kingdom tour operator
tcs and starquest expeditions inc usa tour operator
the moorings limited british virgin islands tour operator
travel turf inc united kingdom tour operator
trek america travel limited 60 usa tour operator
ttss limited united kingdom tour operator
williment travel group limited new zealand tour operator
world challenge expeditions limited united kingdom tour operator
your man tours inc usa tour operator
zegrahm expeditions inc usa tour operator
in addition to the ownership of 100 of the ordinary shares of the above listed principal operating subsidiaries the group also owns the 
following shares of these companies
principal operating subsidiary additional classes of shares
porter and haylett limited 180000 £1 redeemable ordinary shares
ski bound limited 167502 £1 ‘a’ ordinary shares
club turavia sa de cv 2367133 mxp100 variable shares
falcon leisure group overseas limited 615000 €1 preference shares wwwtuitravelplccom
tui travel plc annual report  accounts 2011 137
group at a glance strategic overview business and ﬁnancial review governance financial statements shareholder information
financial statements
notes to the consolidated ﬁnancial statements continued
wwwtuitravelplccom
136 tui travel plc annual report  accounts 2011
32 earningsloss per share continued
nongaap measure
reconciliation of underlying operating proﬁt to underlying earnings
        restated
       year ended year ended
       30 september 30 september
       2011 2010
      note £m £m
underlying operating proﬁt       471 399
net underlying ﬁnancial expenses      5 111 110
underlying proﬁt before tax       360 289
underlying tax charge at 27 2010 27       97 79
underlying proﬁt for the year       263 210
attributable to ordinary shareholders       261 210
attributable to noncontrolling interests       2 –
underlying proﬁt for the year       263 210
the 2010 reconciliation has been restated as described in note 1bii the underlying numbers shown are as described in note 1biii and 
exclude £35m being the impact of the volcanic ash in 2010 and include the representation from discontinued operations of the results of 
jet4you as described in note 1bii
33 post balance sheet events
details of acquisitions since the balance sheet date are set out in note 13
34 ultimate parent company
the ultimate parent company is considered to be tui ag a company registered in berlin and hanover federal republic of germany  
at 30 september 2011 tui ag was the beneﬁcial owner of 5547 of the ordinary share capital of the company
in addition a number of bonds are held by tui ag either directly or indirectly and if converted this would give rise to 52309463 of  
new shares on a fullydiluted basis if all bonds were converted tui ag’s shareholding would be 5083 at 30 september 2011
tui ag prepares consolidated ﬁnancial statements which include the results of the group tui ag is the parent undertaking of the smallest  
and largest group to consolidate these ﬁnancial statements the accounting reference date of tui ag is 30 september copies of the tui ag 
ﬁnancial statements are publicly available and can be obtained from the registered ofﬁce of this company situated at karlwiechertallee 4 
30625 hanover federal republic of germany
financial statements
independent auditors’ report to the members of tui travel plc
opinion on other matters prescribed by the 
companies act 2006
in our opinion
• the part of the directors’ remuneration report to be audited has 
been properly prepared in accordance with the companies act 
2006 and
• the information given in the directors’ report for the ﬁnancial year 
for which the parent company ﬁnancial statements are prepared is 
consistent with the parent company ﬁnancial statements
matters on which we are required to report  
by exception
we have nothing to report in respect of the following matters where 
the companies act 2006 requires us to report to you if in our opinion
• adequate accounting records have not been kept by the parent 
company or returns adequate for our audit have not been received 
from branches not visited by us or
• the parent company ﬁnancial statements and the part of the 
remuneration report to be audited are not in agreement with the 
accounting records and returns or
• certain disclosures of directors’ remuneration speciﬁed by law are 
not made or
• we have not received all the information and explanations we 
require for our audit
other matter
we have reported separately on the group ﬁnancial statements  
of tui travel plc for the year ended 30 september 2011
roger de peyrecave senior statutory auditor
for and on behalf of pricewaterhousecoopers llp
chartered accountants and statutory auditors
london
4 december 2011
we have audited the parent company ﬁnancial statements of tui 
travel plc for the year ended 30 september 2011 which comprise the 
parent company balance sheet and the related notes the ﬁnancial 
reporting framework that has been applied in their preparation is 
applicable law and united kingdom accounting standards united 
kingdom generally accepted accounting practice
respective responsibilities of directors and auditors
as explained more fully in the directors’ responsibilities statement  
set out on page 50 the directors are responsible for the preparation 
of the parent company ﬁnancial statements and for being satisﬁed 
that they give a true and fair view our responsibility is to audit and 
express an opinion on the parent company ﬁnancial statements  
in accordance with applicable law and international standards on 
auditing uk and ireland those standards require us to comply  
with the auditing practices board’s ethical standards for auditors
this report including the opinions has been prepared for and only  
for the company’s members as a body in accordance with chapter 3 
of part 16 of the companies act 2006 and for no other purpose  
we do not in giving these opinions accept or assume responsibility 
for any other purpose or to any other person to whom this report is 
shown or into whose hands it may come save where expressly agreed 
by our prior consent in writing
scope of the audit of the ﬁnancial statements
an audit involves obtaining evidence about the amounts and 
disclosures in the ﬁnancial statements sufﬁcient to give reasonable 
assurance that the ﬁnancial statements are free from material 
misstatement whether caused by fraud or error this includes an 
assessment of whether the accounting policies are appropriate to the 
parent company’s circumstances and have been consistently applied 
and adequately disclosed the reasonableness of signiﬁcant accounting 
estimates made by the directors and the overall presentation  
of the ﬁnancial statements in addition we read all the ﬁnancial  
and nonﬁnancial information in the annual report  accounts to 
identify material inconsistencies with the audited ﬁnancial statements  
if we become aware of any apparent material misstatements  
or inconsistencies we consider the implications for our report
opinion on ﬁnancial statements
in our opinion the parent company ﬁnancial statements
• give a true and fair view of the state of the company’s affairs as at 
30 september 2011
• have been properly prepared in accordance with united kingdom 
generally accepted accounting practice and
• have been prepared in accordance with the requirements of the 
companies act 2006 wwwtuitravelplccom
tui travel plc annual report  accounts 2011 139
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138 tui travel plc annual report  accounts 2011
financial statements
notes to the company’s ﬁnancial statements
derivative ﬁnancial instruments
derivative ﬁnancial instruments are stated at fair value the gain  
or loss on remeasurement to fair value is recognised immediately in 
the income statement however where derivatives qualify for hedge 
accounting recognition of any resultant gain or loss depends on the 
nature of the item being hedged
convertible bond
the convertible bonds are split into two components a debt 
component and a component representing the embedded derivatives 
in the bond the debt component represents the group’s liability  
for future interest coupon payments and the redemption amount 
the embedded derivatives represent the value of the option that 
bondholders have to convert into ordinary shares of the company 
these derivatives were valued on inception and recognised in the 
convertible bond reserve in equity
the debt component of the convertible bonds are measured  
at amortised cost and therefore increase as the present value of  
the interest coupon payments and redemption amount increases 
with a corresponding charge to ﬁnance cost the debt component 
decreases by the cash interest coupon payments made the embedded 
derivatives are measured at fair value at each balance sheet date and 
changes in fair value are recognised in the income statement
issue costs are apportioned between the liability and derivative 
components of a convertible bond based on the allocation of 
proceeds to the liability and derivative components when the 
instruments are ﬁrst recognised
sharebased payment
the company operates sharebased payment schemes for the 
employees of the company and its subsidiaries the fair value of 
shares awarded to employees is an employee expense and is borne  
by fellow group subsidiaries the fair value is measured at the award 
date and is spread over the period during which the employee 
becomes unconditionally entitled to the awards calculating the fair 
value takes into account various factors including the expected volatility 
of the shares the dividend yield and the risk free interest rate
the company makes awards of its own shares to the employees  
of its subsidiaries and as such recognises an increase in the cost  
of investment in its subsidiaries equivalent to the equitysettled 
sharebased payment charge recognised in its subsidiaries’ ﬁnancial 
statements with the corresponding credit being recognised directly  
in equity the increase in investments and credit to equity for the  
year ended 30 september 2011 is £19m 30 september 2010 £14m 
further information on the share schemes is provided in note 6d  
to the consolidated ﬁnancial statements
transactions of the company’s employee beneﬁt trusts are included 
in the company’s ﬁnancial statements in particular the trusts’ 
purchases and sales of shares in the company are debited and 
credited directly to equity
related parties
for the purpose of these ﬁnancial statements parties are considered 
to be related to the company if the company has the ability directly 
or indirectly to control the party or exercise signiﬁcant inﬂuence over 
the party making ﬁnancial and operating decisions or vice versa or 
where the company and the party are subject to common control or 
common signiﬁcant inﬂuence related parties may be individuals or 
other entities the company has taken advantage of the exemption 
contained within frs 8 and has not therefore disclosed transactions 
or balances with entities which are whollyowned subsidiaries
a accounting policies
basis of preparation
the following accounting policies have been applied consistently in 
dealing with items which are considered material in relation to the 
company’s ﬁnancial statements
accounting convention
the ﬁnancial statements have been prepared in accordance with 
applicable uk accounting standards and under the historical cost 
convention the ﬁnancial statements have been prepared on the 
going concern basis which assumes that the company will continue  
in operational existence for the foreseeable future the company  
has taken advantage of the exemption under section 408 of the 
companies act 2006 from presenting its own proﬁt and loss account 
the proﬁt after tax included in the ﬁnancial statements of the company 
determined in accordance with the act was £174m 2010 £214m
the company is exempt from the requirement to prepare a cash  
ﬂow statement as its cash ﬂows are included within the published 
consolidated statement of cash ﬂows of tui travel plc
the company has taken advantage of the exemption contained  
within frs 29 and has not provided the required ﬁnancial  
instruments disclosure on the basis that the group’s consolidated 
ﬁnancial statements include consolidated ifrs 7 disclosures which  
are compliant with the requirements of frs 29
foreign currencies
transactions in foreign currencies are translated at the foreign 
exchange rate ruling at the date of the transaction monetary assets 
and liabilities denominated in foreign currencies at the balance sheet 
date are translated to sterling at the foreign exchange rate ruling at 
that date foreign exchange differences arising on translation are 
recognised in the income statement nonmonetary assets and 
liabilities that are measured in terms of historical cost in a foreign 
currency are translated using the exchange rate at the date of the 
transaction nonmonetary assets and liabilities denominated in 
foreign currencies that are stated at fair value are translated to 
sterling at foreign exchange rates ruling at the dates the fair values 
were determined
investments
investments in subsidiaries are stated at cost less provision for 
impairment dividends received and receivable are credited to  
the company’s proﬁt and loss account
interestbearing borrowings
interestbearing borrowings are recognised initially at fair value  
less attributable transaction costs subsequent to initial recognition 
interestbearing borrowings are stated at amortised cost with any 
differences between cost and redemption value being recognised  
in the income statement over the period of the borrowings on an 
effective interest rate basis
classiﬁcation of ﬁnancial instruments issued
financial instruments issued by the company are treated as equity 
only to the extent that they meet the following conditions they 
include no contractual obligation upon the company to deliver cash  
or other ﬁnancial assets or to exchange ﬁnancial assets or ﬁnancial 
liabilities with another party under conditions that are potentially 
unfavourable to the company and where the instrument will or may 
be settled in the company’s own equity instruments it is either a 
nonderivative that includes no obligation to deliver a variable number 
of the company’s own equity instruments or is a derivative that will 
be settled by the company exchanging a ﬁxed amount of cash or 
other ﬁnancial assets for a ﬁxed number of its own equity instruments
       30 september 30 september
       2011 2010
      note £m £m
fixed assets
investment in subsidiary undertakings      d 1430 918
total investments       1430 918
current assets
derivative ﬁnancial instruments       1 6
debtors      e 384 1145
cash at bank and in hand       33 –
       418 1151
creditors amounts falling due within one year     f 398 967
net current assets       20 184
total assets less current liabilities       1450 1102
creditors amounts falling due after more than one year     g 926 638
provision for liabilities      h 24 19
net assets       500 445
capital and reserves
called up share capital      i 112 112
proﬁt and loss account      j 277 227
convertible bond reserve      j 85 83
other reserves      j 26 23
total shareholders’ funds      j 500 445
the ﬁnancial statements were approved by a duly authorised committee of the board of directors on 4 december 2011 and were signed on its 
behalf by
peter j long william h waggott
chief executive chief financial ofﬁcer
company number 6072876
the notes on pages 139 to 143 form part of these ﬁnancial statements
financial statements
company balance sheet
at 30 september 2011 financial statements
wwwtuitravelplccom
tui travel plc annual report  accounts 2011 141
group at a glance strategic overview business and ﬁnancial review governance financial statements shareholder information
wwwtuitravelplccom
140 tui travel plc annual report  accounts 2011
e debtors
       30 september 30 september
       2011 2010
       £m £m
amounts owed by ultimate parent company       – 370
amounts owed by group undertakings       281 705
corporation tax recoverable       78 35
prepayments       11 2
other debtors       14 33
total       384 1145
amounts owed by ultimate parent
amounts owed by ultimate parent comprise a loan of £nil 2010 £370m the loan was unsecured bore interest at euribor plus a margin  
of 19 had no ﬁxed date of repayment and was repayable on demand the loan was fully repaid during the year
amounts owed by group undertakings
amounts owed by group undertakings are unsecured includes €30m equating to £26m at 30 september 2011 2010 £360m that bears 
interest at 43 2010 60 and matures on 31 august 2012 and €150m equating to £130m at 30 september 2011 2010 £nil that bears 
interest at 6month euribor plus a margin of 19 and matures on 28 march 2012 £122m 2010 £336m is unsecured bears no interest  
has no ﬁxed date of repayment and is repayable on demand
other debtors
other debtors includes £14m 2010 £nil of cash held in an escrow account as required for the group’s external borrowing facilities
f creditors amounts falling due within one year
       30 september 30 september
       2011 2010
       £m £m
bank overdraft       – 112
deferred and contingent consideration       3 12
amounts owed to ultimate parent company       38 589
amounts owed to group undertakings       338 234
accruals and deferred income       19 20
total       398 967
amounts owed to ultimate parent company
amounts owed to ultimate parent comprise a shareholder loan of €30m equating to £26m at 30 september 2011 2010 €669m equating  
to £575m at 30 september 2010 current account of €14m equating to £12m at 30 september 2011 2010 €14m equating to £12m at  
30 september 2010 and interest payable of €nil 2010 €2m equating to £2m at 30 september 2010 the loan bears interest at euribor plus 
a margin of 275 2010 19 per annum the company can make voluntary repayments at any time during the term of the loan subject to a 
minimum repayment of €1m 2010 €10m and the giving of 10 days’ notice 2010 30 days’ the drawn balance of the loan at 30 september 
2011 was €30m 2010 €669m not including interest payable the loan is repayable on as follows 30 april 2012 €20m and 31 august 2012 
€10m all loan balances are unsecured
amounts owed to group undertakings
amounts owed to group undertakings include £24m 2010 £nil that bears interest at the three month sterling libor rate and is repayable on 
demand subject to the borrower or the lender giving seven days’ notice all other amounts owed to group undertakings are unsecured interest 
free have no ﬁxed date of repayment and are repayable on demand
g creditors amounts falling due after more than one year
       30 september 30 september
       2011 2010
       £m £m
convertible bonds       654 633
deferred and contingent consideration       2 5
amounts owed to group undertakings       270 –
total       926 638
details of the convertible bonds are given in note 19 of the consolidated ﬁnancial statements the accounting under uk gaap and ifrs is  
the same
amounts owed to group undertakings comprise a loan of £269m and interest payable of £1m the loan bears interest at libor plus a margin  
of 5 per annum is unsecured and is not repayable in the foreseeable future with the latest repayment date of 31 march 2026
additions in the year of £534m comprise the following increases  
in investments £246m increase in the cost of investment into  
tt holdings france sa during the year for the purposes of 
recapitalising the group’s french business £269m investment into 
tui travel amber ew llp a company which holds the investment 
into the ownership of the group’s two main uk brands first choice 
and thomson as described in note 6 of the consolidated ﬁnancial 
statements and £19m of sharebased payment liabilities incurred the 
costs of the sharebased schemes which are operated for employees 
of the company’s subsidiaries are borne by the subsidiaries subject 
to local accounting standards the company recognises an increase  
in the investment in the subsidiary and a credit to other reserves in 
accordance with frs 20 sharebased payments
details of the principal operating subsidiaries held directly and 
indirectly by the company and by the group in the year ended  
30 september 2011 can be found in notes 31 and 13 respectively  
of the consolidated ﬁnancial statements
an impairment of £10m has been charged in the year in respect  
of the cost of investment into tt holdings france sa following the 
recapitalisation during the year and the outcome from the group’s 
annual impairment exercise
the investment into tt holdings france sa principally relates to  
two cgus that are the same as those used in the group’s annual 
impairment test these two cgus are the french tour operator and 
the french airline corsair detailed disclosure of the impairment  
test and the basis for calculation have been set out in note 10 of the 
consolidated ﬁnancial statements the cost of investment has been 
compared against the value in use of the underlying investment of 
corsair and the fair value less costs to sell basis for the french tour 
operator using the discounted cash ﬂows adjusted for the french 
tour operator as a basis of measurement this fair value less costs  
to sell basis has been used as the board’s restructuring plan is not 
sufﬁciently advanced to meet the criteria for including both the costs 
and the associated beneﬁts of the plan in a value in use calculation 
and not as a result of any intention to dispose of this cgu
the calculation of recoverable value for these two cgus use the 
following assumptions
• cash ﬂow projections based on the group’s latest approved 
ﬁveyear business plan incorporating adjustments to fair value 
where appropriate
• cash ﬂows beyond the plan period are extrapolated using an 
inﬂationary only growth rate of 2
• cash ﬂows include the impact of working capital in the both the 
asset base and the impact on cash ﬂows over the plan period for 
the value in use calculation only
• cash ﬂows are discounted using the group’s wacc adjusted as 
appropriate for business speciﬁc factors such as business and 
geographic risk the riskadjusted pretax wacc for these two 
cgus was 11
financial statements
notes to the company’s ﬁnancial statements continued
taxation
the charge for taxation is based on the proﬁt or loss for the  
period and takes into account taxation deferred because of timing 
differences between the treatment of certain items for taxation and 
accounting purposes except as otherwise required by accounting 
standards full provision without discounting is made for all timing 
differences which have arisen but not reversed at the balance sheet 
date timing differences arise when items of income and expenditure 
are included in tax computations in periods different from their 
inclusion in the ﬁnancial statements
dividends on shares presented within shareholders’ funds
dividends distributed to the company’s shareholders is recognised  
as a liability and deducted from equity in the group’s ﬁnancial 
statements in the period in which the dividends are appropriately 
authorised and approved for payment and are no longer at the 
discretion of the company unpaid dividends that do not meet  
these criteria are disclosed in the notes to the ﬁnancial statements
auditors’ remuneration
the company’s 2011 audit fee was £25000 2010 £25000
b directors’ remuneration and employees
details of directors’ remuneration gains made by them on vesting of 
share awards amounts receivable by them under long term incentive 
schemes and pension entitlements in the current and prior years are 
contained in the audited section of the remuneration report and in 
note 6 of the consolidated ﬁnancial statements the company had 
seven employees 2010 seven details of all share awards issued by 
the company are given in note 6d of the consolidated ﬁnancial 
statements all directors’ remuneration are borne by subsidiary 
companies
c dividends
details of dividends paid and proposed by the company in the 
current and prior year and details of dividends proposed subsequent 
to the balance sheet date are given in note 9 of the consolidated 
ﬁnancial statements
d investments
 shares in
 subsidiaries
 £m
cost
at 1 october 2010 922
additions 534
disposals 12
at 30 september 2011 1444
provision for diminution in value
at 1 october 2010 4
impairment 10
at 30 september 2011 14
net book value
at 30 september 2010 918
at 30 september 2011 1430 financial statements
wwwtuitravelplccom wwwtuitravelplccom
142 tui travel plc annual report  accounts 2011 tui travel plc annual report  accounts 2011 143
group at a glance strategic overview business and ﬁnancial review governance financial statements shareholder information
financial statements
notes to the company’s ﬁnancial statements continued
k contingent liabilities
under the terms of guarantees given to the civil aviation authority and other relevant authorities by the company in respect of certain 
subsidiaries in the event of default the company could be held liable to the extent of the subsidiaries’ net trading liabilities at the time of 
default
there were contingent liabilities at 30 september 2011 in respect of guarantees and indemnities entered into as part of the ordinary course  
of the group’s business no material losses are currently expected to arise from such contingent liabilities the company and its subsidiaries  
is at any time defending a number of actions against it arising in the normal course of business provision is made for these actions where this  
is deemed appropriate no actions which are outstanding at 30 september 2011 are expected to have a material effect on these accounts  
the directors consider that adequate provision has been made for all known liabilities
where the company enters into ﬁnancial guarantee contracts to guarantee the indebtedness of other companies within its group the company 
considers these to be insurance arrangements and accounts for them as such in this respect the company treats the guarantee contract as  
a contingent liability until such time as it becomes probable that the company will be required to make a payment under the guarantee at  
30 september 2011 the company had contingent liabilities in respect of counterguarantees for letters of credit amounting to £111m 2010 £166m
l related party transactions
apart from with its own subsidiaries which are included in the consolidated ﬁnancial statements tui travel plc in carrying out its ordinary 
business activities had transactions with its ultimate parent company tui ag which delivered services to companies in the group
all transactions with related parties were executed on an arm’s length basis and under normal conditions of trade with independent third parties
details of transactions with related parties and balances outstanding at the balance sheet date are set out in the tables below
   interest received expenses
    
     year ended year ended year ended year ended
     30 september 30 september 30 september 30 september
     2011 2010 2011 2010
     £m £m £m £m
ultimate parent tui ag     2 4 6 22
total     2 4 6 22
   debtors creditors
    
     30 september 30 september 30 september 30 september
     2011 2010 2011 2010
     £m £m £m £m
ultimate parent tui ag     – 370 38 589
total     – 370 38 589
m post balance sheet events
details of post balance sheet events relevant to the company and its group are given in note 33 of the consolidated ﬁnancial statements
h provision for liabilities
        £m
deferred tax 
other timing differences        24
total provision for liabilities        24
at 1 october 2010        19
deferred tax charge to proﬁt and loss account        7
deferred tax credit to equity        2
at 30 september 2011        24
other timing differences comprise the deferred tax charge on the equity portion of the convertible bonds and sharebased payments
i called up share capital
       30 september 30 september
       2011 2010
       £m £m
issued and fully paid
1118010670 2010 1118010670 ordinary shares of 10p each      112 112
total       112 112
as described more fully in note 34 the ultimate parent company tui ag is the beneﬁcial owner of 5547 of the company’s issued ordinary 
share capital as at 30 september 2011
at 30 september 2011 12700211 shares 2010 13191246 shares were held by the group’s employee beneﬁt trusts based on 30 september 
2011 share price of £149 2010 £214 the value of shares held was £18961415 2010 £28282031
during the year ended 30 september 2011 the group’s employee beneﬁt trusts acquired 3m shares at market value for consideration of £7m 
2010 £7m
details of dividends debited to equity in the year are set out in note 9 of the consolidated ﬁnancial statements
whilst the company has the authority to purchase its own shares it has not done so in either the current or prior years
j capital and reserves
    share proﬁt and convertible other
    capital loss account bond reserve reserves total
    £m £m £m £m £m
at 30 september 2009    112 127 – 30 269
acquisition of shares    – – – 7 7
disposal on award of shares    – 4 – 18 14
sharebased payment costs    – – – 18 18
proﬁt for the year    – 214 – – 214
equity portion of convertible bonds    – – 83 – 83
dividends paid    – 118 – – 118
at 30 september 2010    112 227 83 23 445
acquisition of shares by employee beneﬁt trust    – – – 7 7
disposal on award of shares    – – – 9 9
sharebased payment costs    – – – 19 19
proﬁt for the year    – 174 – – 174
foreign exchange on net investment hedge    – 2 – – 2
effect of rate change on convertible bond    – – 2 – 2
dividends paid    – 122 – – 122
at 30 september 2011    112 277 85 26 500 wwwtuitravelplccom wwwtuitravelplccom
144 tui travel plc annual report  accounts 2011 tui travel plc annual report  accounts 2011 145
group at a glance strategic overview business and ﬁnancial review governance
shareholder information
contacts and advisers
shareholder information
signiﬁcant shareholdings
shareholder information financial statements
solicitors
herbert smith
bankers
barclays bank plc
citigroup na
royal bank of scotland plc
société générale
registrars and transfer ofﬁce
equiniti limited
aspect house
spencer road
lancing bn99 6da
shareholder contact centre no 0871 384 2030
international 44 0 121 415 7047
website wwwshareviewcouk
company website
wwwtuitravelplccom
secretary and registered ofﬁce
a l john
tui travel house
crawley business quarter
fleming way
crawley
west sussex rh10 9ql
telephone 01293 645700
facsimile 01293 645704
registered number 6072876
independent auditors
pricewaterhousecoopers llp
1 embankment place
london
wc2 6rh
merchant bankers
lazard brothers  co limited
deutsche bank
stockbrokers
rbs hoare govett limited
deutsche bank
at the date of approval of the annual report  accounts for the  
year ended 30 september 2011 the company had been notiﬁed  
of the following holdings in excess of 3 in its issued share capital
 shares 
tui ag 620137750 5547
monteray enterprises 53302480 477
marathon asset management 42438940 380
dws investments 36368629 325
blackrock 34660366 310
financial calendar
annual general meeting 7 february 2012
interim results may 2012
preliminary results december 2012 wwwtuitravelplccom wwwtuitravelplccom
146 tui travel plc annual report  accounts 2011 tui travel plc annual report  accounts 2011 147
group at a glance strategic overview business and ﬁnancial review governance shareholder information financial statements
load factor
passenger volumes as a percentage of capacity
m
million
merger
the business combination of the tourism division of tui ag 
excluding certain hotel assets and first choice holidays plc
ota
online travel agent
psp
performance share plan
pwc
pricewaterhousecoopers llp
roic
return on invested capital
rpi
retail price index
sector
subset of tui travel plc whose businesses share similar characteristics
sa
specialist  activity sector
summer season
may to october
tsr
total shareholder return
the board
tui travel plc board of directors
the company
tui travel plc
the group
the tui travel plc group of companies
tui ag
tui travel plc’s majority shareholder
unwto
united nations world travel organisation
vcsp
value creation synergy plan
wacc
weighted average cost of capital
winter season
november to april
ad
accommodation  destinations sector
agm
annual general meeting
apac
asia paciﬁc region
asp
average selling price
assetright
optimum mix of owned and leased assets
b2b
businesstobusiness
b2c
businesstoconsumer
bn
billion
cis
commonwealth of independent states
co
2
rpk
carbon dioxide emissions per revenue passenger kilometre
controlled distribution
owned and franchised retail shops call centre and website
coso
the committee of sponsoring organizations of the treadway 
commission
dabs
deferred annual bonus scheme
differentiated content
includes hotels and products that have been tailored to offer 
additional services and facilities to our customers
direct distribution
retail call centre and website
eps
earnings per share
ets
european emissions trading scheme
gdp
gross domestic product
gmb
group management board
ifrs
international financial reporting standards
kpis
key performance indicators
glossary of key terms
shareholder information
shareholder discount
quark expeditions
best price on the wwwquarkexpeditionscom website plus a further 
5 discount per adult on all departures
skibound
best price on the wwwskiboundholidayscouk website plus a further 
discount of £20 per adult to a maximum of £40 per booking on all our 
french club hotel destinations
  discounts are not valid on accommodationonly bookings and cannot be used in 
conjunction with any discretionary discounts group savings or other promotional offers
  discounts are not valid on accommodation or ﬂightonly bookings and cannot be used in 
conjunction with other promotional offers including but not restricted to group discounts 
valid on charter ﬂights to european destinations only
in order to qualify for the discount private shareholders including 
those holding through a nominee account must hold at least 500 
ordinary shares in the company on the date of booking the holiday 
and must have been on the register of shareholders for a minimum 
period of one year on that date
to register for your discount call equiniti on 0871 384 2030 monday 
to friday 08301730hrs you will be required to provide details to 
conﬁrm you are an eligible shareholder – in the case of a nominee 
account this would normally be a letter from the registered 
shareholder once conﬁrmed you will be given a unique code
to make a booking call us on 0844 800 3104 monday wednesday 
and friday 09001800hrs tuesday 10001800hrs and saturday  
09001230hrs you will be asked for your unique code and your 
discount will be applied
share dealing service
an executiononly sharedealing service for the purchase and sale  
of tui travel plc shares is available from natwest stockbrokers 
natwest stockbrokers is authorised and regulated by the financial 
services authority and is a member of the london stock exchange 
and plus
for details please contact
natwest stockbrokers
suite 11
3 minster court
mincing lane
london ec3r 7dd
telephone 0808 208 4433
find out more
tui travel plc has a corporate website which can be accessed 
through wwwtuitravelplccom
eligible shareholders are entitled to the following discounts which  
are subject to change when booking holidays through our dedicated 
shareholder discount line the shareholder must be the lead name 
on the booking
best price on the dedicated website plus a further discount of £20  
per adult to a maximum of £40 per booking cruise shortmedium 
haul destinations or £40 per adult to a maximum of £80 per booking 
long haul destinations for the following
first choice wwwﬁrstchoicecouk
thomson wwwthomsoncouk
thomson worldwide wwwthomsonworldwidecom
citalia wwwcitaliacom
jetsave wwwjetsavecouk
meon villas wwwmeonvillascom
sovereign wwwsovereigncom
hayes  jarvis wwwhayesandjarviscouk
thomson lakes  mountains wwwthomsonlakescouk
thomson ski  snowboarding wwwthomsonskicouk
thomson airways
best price on the wwwthomsoncouk website plus a further discount 
of £10 per person for a return journey shortmedium haul destinations 
or £20 per person for a return journey long haul destinations
hotelopia
best price on all hotels on the wwwhotelopiacouk website plus an 
additional 14 discount
trek america
best price on the website wwwtrekamericacom plus an additional 
10 discount
the moorings
best price on the wwwmooringscom website plus a further  
discount of £20 per adult to a maximum of £40 per booking short 
haul destinations or £40 per adult to a maximum of £80 per booking 
long haul destinations
sunsail
best price on the wwwsunsailcouk website plus a further discount  
of £20 per adult to a maximum of £40 per booking short haul 
destinations or £40 per adult to a maximum of £80 per booking  
long haul destinations
le boat
best price on the wwwleboatcouk website plus a further discount  
of £20 per adult to a maximum of £40 per booking on all destinations
real gap
inspired breaks
best price on the wwwrealgapcouk website plus a further discount 
of 10 wwwtuitravelplccom
148 tui travel plc annual report  accounts 2011
index
a
accommodation  destinations sector 5 85
accounting policies 72
acquisitions 32 109
annual general meeting 48
audit committee 53
auditors 49
b
board committees 52
board of directors 46
brands 3
business model 14
c
capital management 129
cash and net debt 131
cash conversion 130
chairman’s statement 8
charitable giving 30
chief executive’s interview 10
chief executive’s statement 9
colleagues 31
company balance sheet 138
consolidated balance sheet 69
consolidated income statement 67
consolidated statement of cash ﬂows 71
consolidated statement of changes in equity 70
consolidated statement of comprehensive income 68
contacts and advisers 145
corporate governance report 51
current trading 44
d
directors’ biographies 47
directors’ remuneration 60
directors’ report 48
directors’ responsibilities 50
distribution and brands 16
dividends 8 100
e
earnings per share 8 33 135
emerging markets 5 17 41
emerging markets sector 5
f
financial calendar 144
financial highlights 7
financial statements 66
g
governance 46
group management board 24
group overview 2
group performance 32
h
health  safety 27
i
independent auditors’ report 66 137
independent travel 17
investment case ifc
k
key performance indicators 18
m
mainstream sector 4
market overview 12
n
nomination committee 53
notes to the consolidated ﬁnancial statements 72
o
online 10 13 14
operational highlights 6
our structure 4
outlook 13 44
p
pensions 90
people 24
principal operating subsidiaries 133
principal risks 20
product  content 16
r
remuneration committee 56
remuneration report 56
restatement of prior years’ consolidated ﬁnancial statements 72
s
segmental performance 35 85
separately disclosed items 34 88
shareholder discount 146
signiﬁcant shareholdings 144
specialist  activity sector 5
strategic overview 8
strategy 16
suppliers 30 48
sustainable development 28
t
tax 99 113
total shareholder return 59
tui travel overview 2
w
where we operate 3 
who we are 2
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recycled for further use and on average 99 of any waste associated 
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photography supplied by tui travel plc businesses
wwwtuitravelplccom tui travel plc
tui t ravel house
crawley business quarter
fleming way
crawley
west sussex
rh10 9ql
t elephone 0044 01293 645700
wwwtuitravelplccom


Summary:
 wwwtuitravelplccom wwwtuitravelplccom
8 tui travel plc annual report  accounts 2011 tui travel plc annual report  accounts 2011 9
group at a glance strategic overview business and ﬁnancial review governance financial statements shareholder information
initiatives across the group and the improvement  
in working capital as a result of these initiatives has 
helped us to end the year in a net cash position
as one of the world’s leading leisure travel companies 
we operate in a highly regulated industry from both a 
tour operator and an airline perspective we work with 
national governments and the eu to ensure that our 
position is understood and respected and our opinion 
remains that a level playing ﬁeld across the industry  
is a necessary requirement to allow good companies 
to ﬂourish
we have a clear strategy and road map for delivering 
our strategic growth initiatives as trading in the new 
ﬁnancial year progresses it is apparent that customers 
in some source markets are booking later than usual 
and that the recovery in demand for north african 
destinations will be slow for some considerable time 
we have adjusted our winter capacities to reﬂect the 
current market conditions and are trading in line 
with our expectations summer capacities will be 
ﬂexed to match proﬁtable demand
we remain focused on our strategy of increasing the 
proportion of sales of differentiated and exclusive 
product and on increasing controlled distribution with 
a focus on online to enhance our customer access and 
reduce distribution costs through our new business 
improvement programme we have selfhelp measures 
in place to help offset the difﬁcult macroeconomic 
environment including clear plans in place for germany 
and france in addition we continue to strengthen our 
cash ﬂow in order to fund the dividend and growth 
all of which means that even with the current 
challenging market conditions we continue to 
operate from a position of strength
finally i am very proud of all my colleagues – 
53000 of them – who are passionate about our 
business and who each year face new challenges 
head on i would like to thank them for all their 
efforts and achievements not only in their own 
businesses but also at the wider group level
peter long
chief executive
these achievements reﬂect the strength of our 
strategy to increase differentiated and exclusive 
product sales increase controlled distribution with 
a focus on online to enhance customer access and 
reduce distribution costs and the delivery of our 
turnaround and cost efﬁciency programmes
having experienced a strong start to trading at the 
beginning of the ﬁnancial year the events of the 
´ arab spring´ affected our performance and we 
reported a £29m impact for the ﬁrst half the 
ﬂexibility we have in our business model meant we 
were able to act quickly and move capacity for the 
summer season from egypt and tunisia to other 
destinations including spain greece and turkey 
– thereby mitigating the full year effect for all our 
source markets except france our french tour 
operators rely heavily on these destinations where 
historically they have collectively accounted for 
about 40 of the programmes and 65 of 
marmara’s alone this together with a weaker 
consumer environment meant that they were 
adversely impacted for the full year and results  
for this source market were very poor we have 
initiated a project to consolidate the businesses of 
the french tour operators with the aim of creating 
a single business with a long term viable future
across the rest of the group we delivered a good 
trading performance in the uk nordic region 
belgium the netherlands canada and austria  
the performance of our differentiated product 
continues to be encouraging we continued to 
make good progress in business improvement 
turnaround and cost efﬁciency especially in 
canada the netherlands and ireland which  
have now all completed their turnarounds the 
performance in canada is particularly pleasing 
where following the completion of the joint venture 
with sunwing the business has transformed itself 
to become a market leader we also achieved a 
signiﬁcant reduction in net separately disclosed 
items which were £74m 2010 £255m 
we continue to focus on cash performance and ended 
the year with a net cash position of £4m 2010 net 
debt of £249m we have a number of cash management 
chairman of the remuneration committee effective  
from that date also post year end on 20 october 
2011 johan lundgren an executive director  
was promoted to deputy chief executive with 
responsibility for the mainstream sector johan 
was previously managing director of the northern 
region of the mainstream sector
the tui travel plc board has resolved to adopt  
a policy designed to achieve at least 25 female 
representation among its members by 2015 
sustainable development
at tui travel we have a ﬁrm commitment to 
sustainable development and our goal is to make 
travel experiences special we seek to achieve this 
whilst minimising environmental impact respecting 
culture and people and bringing economic beneﬁts 
to communities the past year has seen our 
businesses continue to drive ecoefﬁciencies which 
have brought ﬁnancial as well as environmental 
beneﬁts and sustainability has also stimulated  
a number of product innovations there is also 
evidence that our most sustainablymanaged 
hotels are also those which are delivering higher 
quality and customer satisfaction see sustainable 
development on page 28
colleagues
we are a truly international business and our team 
of colleagues numbering some 53000 are based 
worldwide a large proportion of our colleagues are 
customer facing and the level of service they deliver 
to our customers is an essential part of the leisure 
travel experience we have a committed team 
across the whole organisation and on behalf of  
the board i would like to thank them for their  
much valued contribution to our success 
dr michael frenzel
nonexecutive chairman
in january the group updated the market on its 
strategic priorities and the roadmap to achieve 
these objectives since then we have faced not 
only the events that occurred in some of our key 
north african destinations but also increasing 
global economic uncertainty it is testament to  
the strength of our business and its ﬂexibility  
that we have achieved the results that we have
results
the group has achieved an 18 increase in 
underlying operating proﬁt to £471m 2010 
£399m on revenue of £14687m 2010 £13514m 
underlying proﬁt before tax is up 25 to £360m 
2010 £289m underlying earnings per share 
increased 24 to 236p 2010 190p following a 
reduction in separately disclosed items the group’s 
statutory proﬁt before tax was £144m 2010 loss 
of £73m
dividends
the board is recommending a ﬁnal dividend of 80p 
per share 2010 78p on 10 may 2011 the board 
recommended an interim dividend of 33p per 
share 2010 32p thereby resulting in a full year 
dividend of 113p per share 2010 110p the 
group has a progressive dividend policy and will 
look to maintain underlying dividend cover at just 
over two times
board
two of our nonexecutive directors jeremy hicks 
and giles thorley resigned from the board in 
january 2011 and on 4 april 2011 minnow powell 
joined the board as a nonexecutive director and 
chairman of the audit committee in september 
we welcomed another nonexecutive director to 
the board coline mcconville post year end on  
19 october 2011 clare chapman stepped down 
from the board and bill dalton was appointed 
strategic overview
chief executive’s statement
strategic overview
chairman’s statement
having faced a number of geopolitical events in 2011 the most serious of which 
was the north african crisis we are pleased to have achieved an 18 increase in 
underlying operating proﬁt for the full year to £471m 2010 £399m
we are pleased with our performance in 2011 and have delivered another year  
of record proﬁt growth and strong cash ﬂow against a backdrop of unrest in key 
north african destinations and weak consumer sentiment in some source markets