The travel company Tui Group has effectively reduced its losses by two-thirds as a result of an increase in international tourism.
The German leisure company traded on the London Stock Exchange reported a second-quarter loss of €331.2 million, compared to a loss of €939.8 million in the same period last year when Covid-19 limitations reduced demand for foreign vacations.
Between April and the end of June, a total of 5,3 million employees left the company, an increase of more than fivefold, with solid growth observed across all divisions and areas.
Tui’s three shipping brands – Hapag-Lloyd, Marella, and Mein Schiff – operating full fleets boosted demand for cruise vacations after their ships were kept parked or too stringent occupancy limitations the previous year.
Tui’s northern area, which includes the Nordics and nations such as the United Kingdom and Germany, saw its revenue increase from €56 million in 2021 to €1.76 billion this year.
Customer volumes reached 84% of 2019 levels, but the company was unable to earn an underlying profit during the quarter due to flight disruptions that cost it an additional €75 million.
This is the result of a strong rebound in international travel mixed with shortages of ground handling and security personnel at airports, resulting in numerous flight delays and cancellations.
The Platinum Jubilee vacation weekend and Easter holidays were especially chaotic at British airports, with lengthy lines at passport check being the norm.
Hanover-based Tui stated that it has doubled the number of planes on standby and strengthened staffing at key consumer touchpoints, but warned that flight interruptions remained above average this quarter.
For the upcoming peak summer season, however, the company reported that bookings have increased to 90 percent of 2019 levels, a statistic that is projected to approach pre-pandemic levels as the weeks continue.
Sebastian Ebel, the incoming CFO, and CEO of Tui stated that he will engage in “intense” discussions with airports, airlines, and resorts to enhance the customer experience.
Ebel, who succeeds Fritz Joussen as CEO at the end of next month, stated that “the entire European airline industry continues to face issues.”
The business cautioned that it was difficult to predict the impact of the Covid-19 outbreak and Russia’s full-scale invasion of Ukraine on consumer demand and confidence, but it still anticipates posting “substantially favorable” underlying earnings for the current fiscal year.
Julie Palmer, a partner at Begbies Traynor, stated, “We may want to hop on a plane and fly off to the beach, but mayhem at airports is making that more difficult, regardless of the high demand from vacationers or the additional capacity TUI provides.”
The holiday company’s interests, which include hotels, cruises, and flights, shelter it to some degree from understaffed airports. However, many consumers are viewing images of people sleeping on airport floors and delaying bookings until it becomes evident that they will board a plane.
Wednesday’s closing price of 145.35p, a decrease of 1.4%, indicates that the value of Tui Group shares has decreased by half in the past six months.
