Tui losses narrow but it weighs up cuts to winter travel schedule

The travel company Tui has narrowed its annual losses but is reviewing whether to make cuts to the remainder of its winter programme in light of rising coronavirus cases and the spread of the Omicron variant.

Posting a €2.4bn (£2.1bn) loss for the year to the end of September, down from €3.5bn the year before, the group said it was close to breaking even in the final quarter of its financial year.

The company said the first quarter of its new financial year was 93% booked, based on lower winter capacity projections, although still 31% below pre-pandemic levels.

Its chief executive, Friedrich Joussen, expects the holiday market will recover to pre-pandemic levels next summer. “It is still too early to make a real forecast for the 2022 summer season,” he said. “But we are optimistic that tourism will be able to recover to 2019 levels next summer. We want to, we can and we will find our way back to economic strength.”

Joussen said the pandemic had caused holidaymakers to book “much later and at shorter notice” but that next summer was looking “very encouraging in all Tui markets”.

The company said it had 4.1m bookings for its next winter and summer seasons, 1.4m received since 3 October. However, it added: “The increased media coverage of rising incident rates and the emergence of new Omicron variant has weakened this positive momentum, particularly for winter.”

Joussen said there would be “flexibility in deciding whether to offer winter programme capacity at the lower end of the range depending on the so-called fourth corona wave and possible policy decisions with regard to the Omicron variant”, adding: “Capacity plans are regularly reviewed and adjusted.”

Tui, which reported a 40% fall in revenue from €7.9bn to €4.3bn in the year to the end of September, said Easter was already running at about 90% of pre-pandemic levels “predominantly booked by the UK”.

For summer, the company has so far received 2.2m bookings, an increase of 535,000 since its last update in early October, “reaffirming the intention to travel and continued appetite for a Tui summer holiday”.

Sign up to the daily Business Today email or follow Guardian Business on Twitter at @BusinessDesk

The company said: “The UK, which is typically the most advanced booked due to the earlier launch of its summer programme, is already 52% sold for May. At this early stage, we believe summer 22 volumes will recover close to normalised summer 19 levels, supported by the stronger starting position and a travel environment underpinned by the continued success of vaccinations.”

Despite the positive signs of a recovery, losses narrowed from €3.1bn in 2020, Tui said it would not issue financial guidance for its next financial next year.

“It remains difficult to forecast the further course of the pandemic and its impact on customer behaviour,” it said. “In view of the uncertain environment, the executive board believes it would not be appropriate to issue a specific forecast for the new financial year 2022 at this time.”


Leave a Reply

This website uses cookies. By continuing to use this site, you accept our use of cookies.  Learn more