UK holiday company MyTravel has returned to profit for the first time since 2001 after cutting both costs and the number of holidays it sells.
MyTravel has been facing increased competition in the UK market
It made a pre-tax profit of £43.8m ($86.3m) in the year to 31 October as European sales offset a UK loss.
Despite the better figures, MyTravel said market conditions remained challenging as it battled competition from internet-based and budget rivals.
MyTravel said it was mulling options including acquisitions to lift profits.
In November, MyTravel confirmed press speculation that it was in talks with First Choice Holidays over the possible acquisition of First Choice's Mainstream business.
In its results statement, MyTravel said that the deal remained an option.
"The possible acquisition of First Choice's Mainstream business and certain related operations is one of a number of opportunities we are evaluating," said chief executive Peter McHugh.
MyTravel added that the winter season remained challenging and that UK bookings for summer 2007 had started slowly.