Breaking News
Investing Pro 0
NEW! Get Actionable Insights with InvestingPro+ Try 7 Days Free

TUI's disruption-hit quarter takes shine off strong summer bookings

Stock Markets Aug 10, 2022 11:52
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters. FILE PHOTO: A Boeing 787 of the travel company TUI takes off from the southern runway at Gatwick Airport in Crawley, Britain, August 25, 2021. REUTERS/Peter Nicholls/File Photo
 
TUIFY
+0.00%
Add to/Remove from a Portfolio
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 

By Yadarisa Shabong

(Reuters) -TUI, one of the world's largest tour operators, took a 75 million euros ($77 million) hit in the third quarter from flight disruption across Europe, pushing it to a loss on Wednesday.

Incoming Chief Executive Sebastian Ebel said there would be significant but lower costs related to air disruption in the fourth quarter, with air traffic normalising in recent days.

"The whole system is still very fragile, and we have days with hardly any disruptions, and we have weeks and days with a lot of disruptions," Ebel, who is replacing long-time chief Friedrich Joussen in October, told journalists.

The extra costs however come as demand holds up, with summer holiday bookings on track to reach near pre-pandemic levels in 2022. The group still expects to return to significant profits this year.

The German company, which runs tour operators, travel agencies, airlines, hotels and cruise liners in holiday destinations across the world, reported an underlying operating loss of 27 million euros for the three months to June 30.

Without the costs related to the roughly 200 flight cancellations the company suffered, mainly affecting departures from Manchester airport in northwest England, TUI (LON:TUIT) said it would have made an adjusted operating profit of 48 million euros in the quarter.

Its shares were down 0.6% in Frankfurt and London by 0827 GMT.

Airports across Europe have seen chaotic scenes in the past few months as staff shortages led to long queues and flight cancellations, while labour strife added to the travel sector's woes.

TUI said summer bookings in the quarter stood at 90% of 2019 levels, and had risen to 93% in July and August as people reserve hotels at short notice, stay longer and splurge on their trips.

Average selling prices in the quarter were 18% ahead of three years ago and the group said it would moderately increase hotel prices in coming years.

Hoteliers such as IHG, Marriott and Hilton have also seen strong demand in the quarter and profitability inching closer to pre-crisis levels.

Bookings for the winter are at an early stage, TUI said, with only the UK market starting to take reservations. Volumes there were up 16% versus winter 2018/19.

Rising inflation that has tightened the cost of living crisis could lead to lower bookings, Ebel said, so the group is cautious when it comes to capacity, but he added he expects stable demand in a more challenging environment.

($1 = 0.9788 euros)

TUI's disruption-hit quarter takes shine off strong summer bookings
 

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Continue with Google
or
Sign up with Email