Tui reports £2.7bn loss as Covid crisis devastates travel industry

Tui, Europe’s largest holiday company, has sunk to a €3bn (£2.7bn) full-year loss, and said it does not expect bookings to return to normal until 2022.

The package tour operator reported revenues of €7.9bn (£7.2bn), a slide of 58% on the previous year, after the coronavirus pandemic and government restrictions halted most international travel.

The company said it was preparing for a new start in 2021 after the crisis, and that there is strong demand for holidays next year although the market will not return to its pre-crisis levels until 2022.

Tui said it was increasing its cost-cutting targets to €400m (per year, €100m more than previously announced, as it tries to become more efficient.

The Anglo-German firm has received several bailouts from the German government. At the start of December it agreed its third financial support package with Berlin, private investors and banks for €1.8bn, on top of the €3bn in bailouts already received.

Tui announced in May it planned to cut 8,000 jobs and shut 166 high-street travel agency branches in the UK and Ireland, enabling it to permanently reduce costs by 30%.

Tui’s chief executive, Fritz Joussen, said: “Very rapid cost and liquidity measures, an accelerated realignment and our flexible business model have enabled us to steer the group through the crisis. Tui is ready for a speedy and successful resumption of travel activities as soon as the lockdowns are lifted and destinations reopen.”

Joussen added: “The prospect of vaccinations from the beginning of the year will significantly increase demand for summer holidays in 2021.”

Winter bookings across all of its markets are 82% lower than the previous year, but bookings for summer 2021 are currently 3% higher than in summer 2019, it said.

The group anticipates that 2021 will be a “transition” year for travel, and added that continued high levels of infection and resulting lockdowns made it hard to make a reliable forecast about travel activity next year.

The company, which has taken more than 2m people on holiday since travel reopened in the summer, said it is poised to resume its operations on a larger scale as soon as coronavirus lockdowns are lifted and destinations reopen.

Joussen said the company intends to test all of its customers for coronavirus before they fly.

“Vaccination protects you but on top of that you need testing, low-cost high-quality tests which are immediately available is absolutely an important thing for us,” he said.

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