Outlook

In the current economic climate, we have taken a cautious approach to capacity planning to ensure that supply is in line with demand and we are pleased with our current booking position.

For Winter 2009/2010, we have seen stronger bookings over the course of recent weeks, which reflects a similar pattern to our experience in Winter 2008/2009, and this gives us confidence that we will achieve required load factors.

Consumer demand for the main summer holiday remains strong, as evidenced by our performance in the Summer 2009 season. We are currently planning for capacity to be approximately flat in most source markets for the Summer 2010 season, although we retain flexibility to adjust supply as demand develops. In addition, our businesses are benefiting from significantly lower cost pressures than Summer 2009 which means that, unlike last year, we do not have to pass on substantial price increases to our customers. In many of our non-UK source markets lower input costs, driven by lower fuel rates, mean that we can reduce prices without harming margins. We expect this to further stimulate demand.

All of the above leaves us well placed to meet the Board’s expectations for the year ending 30 September 2010.