Europe's biggest online travel agency, Ebookers, has unveiled narrower losses after tax, and said it is on track to start making money next year.

The company said on Monday that its losses after tax for the three months to September came in at �2m, ($2.9m) down from �3.5m during the same period one year earlier, while sales jumped 58% on the year to �77.9m.

Ebookers added that on the broadest definition of profit - when interest payments, tax, and asset depreciation costs are stripped out - it had actually edged into the black, generating income of about �200,000 compared with a �700,000 loss during the same period last year.

Ebookers finance chief Nigel Addison Smith said the figures showed the company was achieving its financial targets, and was firmly on track to start turning a profit after tax.

"We look forward to delivering value from our shareholders," he said.

Budget boost

Ebookers' strong growth in sales, which bucked gloomy air travel industry trends, partly reflected growing demand for package holidays, car rentals, and hotel bookings, the company said.

It added that it had benefited from the success of no-frills airlines such as Ryanair and Easyjet, saying they had encouraged more people to go on holidays, and had helped popularise online travel bookings.

The firm said it expected the European online travel market to grow by 43% next year to 9.6bn euros, citing a report from market researchers Jupiter MMXI.

Costs curbed

Ebookers sells package holidays, flights and car rentals over the internet in 11 European countries.

The company has weathered the shakeout in the dotcom sector by negotiating good deals from air travel and holiday suppliers.

It has also kept its costs under control by shifting its ticket and payment processing operation to India, taking advantage of the country's lower business costs.

The firm estimates that having its back office operation in India rather than Europe saves it about �1m every three months.

Ebookers, which snapped up several smaller rivals last year, said it remained on the lookout for potential acquisitions.

City investors welcomed Ebookers' figures, with shares in the firm closing 17.5p higher at 355p on Monday.