MyTravel is starting to see a turnaround in its fortunes

The firm, which secured a life-saving �800m debt-for-equity swap last year, made a pre-tax loss of �114.1m ($208m) in the six months to 30 April.

MyTravel said the improvement was down to an upturn in bookings for the 2005 summer season.

This offset the financial impact of the tsunami and higher fuel costs.

MyTravel said the Indian Ocean tsunami on Boxing Day cost it a total of �11.7m in cancelled bookings and flights to get those affected back home.

It added that the high level of fuel prices cost it an extra �17.5m during the six month period.

For the summer 2005 season, the firm has seen bookings in northern Europe rise by 7%, and by 2% in North America.

Hotel sales

MyTravel's recovery is on schedule Peter McHugh, MyTravel chief executive Check MyTravel's share price

MyTravel, which was previously known as Airtours, also announced it is disposing of its interests in two hotel groups.

It is selling Spanish hotel business Hotetur, in which it holds a 50% stake, to fellow Spanish firm Teinver for �19.3m.

MyTravel is also selling its 50% holding in Tenerife Sol, which owns three hotels in the Canary Islands for �19.2m.

"Overall, while we continue to push for improvements in our UK performance, MyTravel's recovery is on schedule," said MyTravel chief executive Peter McHugh.

"I am confident of our continued progress."

In addition to last year's debt-for-equity swap, MyTravel also reduced costs by cutting back excess capacity and making redundancies.

Its turnover for the six months to 30 April of this year was �1.1bn, down from �1.3bn for the same period in 2004.