“We are closely monitoring events in Egypt and Tunisia and the safety of our customers is our primary consideration,” said chief executive Peter Long in the group’s first-quarter results statement.
“Early indications are that customers are choosing to rebook to alternative destinations and we are taking action to remix our programmes in line with customer demand.”
Many travel companies have been forced to cancel trips to Egypt amid violent protests aimed at ousting President Hosni Mubarak.
However, resorts along the Red Sea have not been affected by the heavy turmoil that has rocked cities throughout the country.
Tour operators were forced to evacuate thousands of holidaymakers from Tunisia last month, after a wave of unrest forced the nation’s president from power and left the popular tourist destination reeling.
“We expect the Egypt and Tunisia situation to negatively affect our second-quarter result,” TUI Travel added Thursday.
“In Egypt, we have cancelled programmes from many source markets, including Germany France, Belgium, the Netherlands and the Nordics.
“In line with (British) government advice, we are continuing our operations from the UK source market to the Red Sea resorts and are closely monitoring the situation.
“If we are not able to operate any further holidays to Egypt for the rest of the winter from any source market except for the UK, we estimate the second-quarter impact will be approximately A£20 million.”
“If UK government advice changes and we can no longer operate from that source market we would expect the impact to increase by approximately A£5 million.”
Turning to Tunisia, the company added that it would take a A£5 million hit from the cost of cancelled holidays and repatriating customers.
The profits warning came as TUI Travel posted a pre-tax loss of 134 million pounds for the group’s first quarter, or three months to the end of December.
However, that was an improvement from the 166-million-pound loss suffered in the same part of 2009.
TUI Travel had suffered generally from the economic downturn and ongoing costs linked to its creation in late 2007, from the merger of British travel group First Choice and the tourism activities of German travel giant TUI.