Europe's largest travel company, TUI, managed to drastically temper losses in the second quarter and is sticking to its full-year forecast, the company said Friday.

In the first three months of the year, when revenues typically take a dip across the industry due to the cold winter months, the German tourism giant halved its net losses to 122.3 million euros ($167.7 million) from 249.7 million euros in the same period one year ago.

Cost-cutting pays off

The savings were the result of rigorous belt-tightening that included reining in costs at the company's headquarters by one third. TUI is also trying to get its cruise ship business back on its feet and control what it sees as excessive expansion of its hotel holdings.

"Lean structures and cost discipline are giving us latitude and room for maneuver for the future," TUI's chief executive Fritz Joussen said. "We are fit for growth and are planning to grow again."

TUI, which runs its business year from October to September, added that earnings had also improved at an underlying level, with its operating loss plunging to 179.6 million euros from 303.4 million euros year-on-year.

The concern expects its underlying profit to expand by 6 to 12 percent for the full year, and for sales to rise by 2 to 4 percent.

cjc/ng (AFP, Reuters, dpa)