TUI shares fall after German court rules on sick staff compensation

High flying shares Anglo-German travel group TUI hit some turbulence after a Hanover court ruling over flight compensation due to a dispute over staff sick days.

In October, FTSE 100-listed TUI was forced to cancel dozens of flights when an unusually high number of pilots and cabin crew pulled sickies.

While the company refunded some costs to customers, it was reluctant to pay additional compensation as it argued the events amounted to a wildcat strike over the threat of potential job cuts.

The flight cancellations had followed TUI's announcement that it was planning to hive off its German TUI Fly airline into a new joint venture, which raised concerns among staff about potential job cuts and worsening working conditions.

On Wednesday the Hanover court ruled that TUI should pay up, saying the company had not presented enough evidence to prove that its workers had staged unofficial industrial action.

Reuters reported that more than 600 complaints have been filed at the court by customers seeking additional compensation under European Union rules.

Shares in TUI topped a 12-month high of 1,220p on Tuesday when it revealed first quarter losses had narrowed on growing revenues, with guidance reiterated for 10% underlying earnings growth for the full year.

As well as confirming talks with Etihad for the sale of TUI Fly to create a new airline, the company said plans to continue making disposals as part of its growth strategy, having sold Hotelbeds Group in September and on Monday announcing it would sell Travelopia, its portfolio of specialist travel brands to KKR for around £325m.

On Wednesday the shares fell almost 7% to 1,135p.