CNG Travel Group, the online travel firm, has reported increased pretax losses, but remains upbeat about its future prospects.

Its pre-tax losses have risen to $5.5 million (€4.2 million) for 2004 from $1.5 million in 2003.

However, the online travel company managed to increase its turnover from $28.2 million to $54.5 million in the same period.

The company warned in November its earnings for 2004 would not meet market expectations.

CNG is based in Tralee, Co Kerry, and specialises in providing online accommodation reservations for airlines, corporate travellers and tourists.

The company floated on the Alternative Investment Market (AIM) last May in London, giving it access to $40 million in fresh finance.

The company said its booking system, known as travel lodging connector (TLC) system, was experiencing strong acceptance and CNG continued to have "first mover advantage" in the online travel sector.

"While we did not reach the milestones we had hoped for in terms of profitability, volumes of reservations, on our technology have been rising sharply and we are confident that we can capitalise on this in the coming year to deliver profits from all divisions of the business," the company said a statement.

The company admitted that while use of the TLC system was strong, converting this into bookings for CNG's own portfolio of hotels had been "lower than expected".

"The CNG board in conjunction with management have taken strong corrective action to address this issue and made a number of technical improvements to the TLC product," added the statement from the company.

The company said it had hoped to sign a major contract in 2004 that would have generated major new revenues, but had decided to renegotiate with this partner for a more long-term arrangement.