Biggest tour operator by revenues of Europe, TUI Travel, seems to be on track to meet its goal of annual profit growth after a jump of 21% in the profits of third-quarter.

This British firm is in talks with German TUI AG, regarding a merger worth 4.4 billion pounds. TUI AG owns 55% of the company and a merger will create the biggest leisure tourism group of the world. The companies have time until September 19 to announce a formal plan.

"I can't comment in terms of a forecast for this year because we're in an offer period and I've got restrictions in terms of the takeover code", said the CEO of TUI Travel, Peter Long.

In June, TUI Travel and TUI AG had announced a plan to merge in an all-share and nil-premium deal. Investors had expected this kind of a tie-up since a long time ever since TUI Travel was formed in 2007 by the merger of First Choice of Britain and the travel business of TUI AG.

The two companies had talks of merger in 2013 but the deal collapsed when TUI AG said that an offer would not make sense considering their share prices at that time.

Analysts at Numis, a corporate advice firm, said that the current plan of a merger did not look very attractive for independent shareholders of TUI Travel, given the fact that TUI AG's share price had underperformed. This meant that either a more favourable deal could come up or the merger could be omitted.

The holidays with higher margin accounted for 71% of summer bookings in this year and made TUI Travel to differentiate itself from its competitors who have holidays that are commodity-like, said Long. He also said that this was a great advantage given the fact that the market is more competitive this year than it was in the last.