TUI lowers winter capacity forecasts, but sees rebound in summer 2022
By Frank Prenesti
Date: Wednesday 08 Dec 2021
(Sharecast News) - Travel company TUI lowered winter capacity plans due to the emergence of the Omicron coronavirus variant as it reported its first quarterly profit since the start of the pandemic.
The company on Wednesday said capacity would "likely" be modified towards the lower end of winter plans of between 60% - 80%. Core earnings for the final quarter came in at €160m. Pre-tax losses for the three months to September 30 came in at €71m, compared to year-on-year losses of €836m.
Despite the slowdown in winter sales, TUI said it expected bookings in summer 2022 to return to pre-pandemic levels after posting a full-year loss of more than €2bn, reflecting the impact of coronavirus restrictions through most of its fiscal year.
Annual revenue fell to €4.73bn compared with €7.94bn a year earlier. TUI, which has received bailouts from the German government and slashed 30% of its workforce in the last 20 months, issued the warning to investors as it reported a €2.5bn down from a €619m profit in 2019.
TUI added that it was hitting 69% of pre-crisis levels in the first quarter of the new financial year and was 93% booked.
"We are generating significant cash inflows and achieving positive results again in many markets and with our hotels and TUI hotel brands," said chief executive Fritz Joussen.
The company, which owns travel agencies, hotels, airlines and cruise ships, had recorded 4.1 million bookings for this winter and summer 2022.
"At this early stage, we believe summer 2022 volumes will recover close to normalised summer 2019 levels, supported by the stronger starting position and a travel environment underpinned by the continued success of vaccinations," TUI said in a statement.
"It remains difficult to forecast the further course of the pandemic and its impact on customer behaviour. 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."
TUI 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 2.2 million bookings, an increase of 535,000 since its last update in early October, "reaffirming the intention to travel".
"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."
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