The travel giant said it nearly halved losses in its first quarter to December 31 to 153 million euros (£134 million) down from losses of 273.6 million (£241.3 million) a year earlier.
It carried 3.3 million customers in the quarter, up by one million on a year ago, and said it had seen “significant” bookings with record days for holidays sold online in both the UK and Germany.
Tui said booking numbers in the last four weeks surpassed levels seen before the pandemic struck, up by 5% for winter 2022-23 and 10% ahead for summer 2023, despite higher prices.
But the figures come after industry data on Monday showed Tui was overtaken by rival Jet2holidays to become the UK’s largest tour operator for the first time.
Data published by the Civil Aviation Authority showed Jet2holidays is licensed to provide package holidays to 5.9 million people in the year to the end of September.
That is compared with 5.3 million for Tui.
But Tui’s chief executive Sebastian Ebel said bookings were “encouraging” and reiterated the firm is set to see a “significant” jump in underlying earnings over the full year.
He said: “Our strategy is clear: quality, cost discipline and winning market share.”
He added: “We agreed on a clear programme in late summer, which is currently being implemented.
“The swift implementation of the strategy is having an effect.
“At the same time, we see the encouraging booking momentum for summer 2023, especially in the last few weeks.
“Both factors strengthen our expectations: We want to significantly increase our underlying EBIT (earnings before interest and taxes) in the full year 2023.”
Demand for holidays has so far ramped up despite surging prices and in the face of wider economic uncertainty, with recent figures from airlines easyJet and Ryanair showing that holidaymakers are still willing to spend on trips.