TUI, the tour operator and airline, have generated virtually no revenue in the last quarter. Because travel restrictions were imposed worldwide to prevent the spread of the coronavirus, it was not possible to offer holidays.
TUI operates hotels, flights and cruises and sells travel package through its travel agencies. All these activities came to a standstill because of the pandemic. Turnover in the third quarter of TUI’s broken financial year decreased by almost 99 percent compared to a year earlier to 71.8 million euro. The net loss was over EUR 1.4 billion.
In order to continue to meet its financial obligations, TUI receives help from the German state. This week, the Travel Group secured a further EUR 1.2 billion in emergency credit, in addition to the EUR 1.8 billion aid already granted in April. There is an expectation that the government will be forced to acquire an interest in the company.
The bookings for this summer are 81 percet lower, with average prices one tenth lower. For next year the group expects a significant upturn in demand for holiday travel. For example, the number of bookings for the summer of 2021 is about 145% higher than the estimated level for this summer if there had been no coronavirus. Topman Fritz Jossen thinks that many customers who have missed their vacation this year want to catch up next year.
In May, TUI announced that 8000 jobs would be lost as a result of the crisis. TUI is allegedly shrinking his German aviation fleet and many travel agencies are being closed down in the United Kingdom. The precise consequences of the reorganization are not yet clear.
Abaigael Schlomski is an accomplished economist and financial journalist with over a decade of experience in the industry. He is a regular contributor to EconomicInform, where he provides in-depth analysis and expert commentary on the latest economic trends and events. With a keen understanding of the financial markets and a talent for breaking down complex economic concepts for a general audience, Maurice is a trusted and respected voice in the field.