Tui reports €1.5bn loss, says annual revenue to fall

Tui plunged to a €1.5bn (£1.3bn) first-half loss and said it expected annual revenue to fall in the current year because of travel restrictions and reduced expectations for the summer season.

The world's biggest travel operator reported a €1.498bn net loss in the six months to the end of March compared with an €815m loss a year earlier. Revenue dropped 89% to €716.3m with foreign travel shut down in Europe because of Covid-19 for most of the first half.

Tui reduced its capacity for the peak summer months to 75% of 2019 levels from 80% in March and stuck to that plan on Wednesday despite summer bookings falling to 2.6m from 2.8m. TUI said some customers had deferred their bookings because of uncertainty over government plans for lifting restrictions.

å"Due to the travel restrictions in the first half of the year and the current expectations for the summer season 2021, we now expect Tui group revenue (IFRS 16) in financial year 2021 to be down year-on-year at constant currency rates," TUI said.

Tui shares fell 4.3% to 409.35p at 08:43 BST after rising by more than a third in 2021.

Summer 2021 bookings are down 69% from two years earlier when business was unaffected by Covid-19, the FTSE 250 group said. The average selling price for summer is up 22% from a year earlier, boosted by a higher proportion of packaged holidays sold.

Tui said customers were keen to travel in future seasons with bookings for the coming winter season up 17% in the UK and summer 2022 bookings up 293% - up from 120% reported in March.

"It remains difficult to forecast the further course of the pandemic and its impact on customer behaviour. In view of these considerable uncertainties, the management board continues to believe that it is not in a position to issue a specific forecast for the financial year 2021," TUI said.

Cash inflow from investments in property, plan and equipment and financial investments will be at least as high as the previous year in this financial year, Tui said.

The Anglo-German tour operator has been hit hard by Covid-19, which has crushed the market for foreign holidays. In January it raised €545m from shareholders as part of a €1.8bn financing package agreed with the German government, banks and its biggest shareholder. Tui further strengthened its finances in April by selling €400m of convertible bonds.