TUI Reports $1.3 Billion Loss After Virus Shuts Down Travel
(Bloomberg) -- TUI AG reported a 1.1 billion-euro ($1.3 billion) quarterly loss, a day after the world’s biggest tour operator secured more aid to prop it up through winter.
Revenue fell 98% for the three months through June after business was essentially shut down by the Covid-19 outbreak, the German company said Thursday in a statement. Summer bookings are off 81%, reflecting the impact of ongoing travel restrictions.
The shares slumped 6.4% to 343.90 pence as of 8:08 a.m. in London, where TUI is listed. The stock has lost almost two thirds of its value this year.
Like other travel companies, TUI has been slammed by the outbreak, which forced lockdowns and brought air travel to a virtual halt. Recent surges of the virus in Spain and elsewhere forced countries to pull back from a reopening, spoiling the chances of airlines and hotels to salvage part of the busy summer season.
TUI said Wednesday that it reached agreement with Germany for an extra 1.2 billion euros in aid, bringing its total bailout to 3 billion euros. The government acquired convertible bonds that could eventually give it a stake of 9%.
In a sign there may be better times ahead, bookings for summer 2021 stand at 145% of what they should have been in 2020 had the pandemic not happened, Chief Executive Officer Fritz Joussen said on a call with journalists. That reflects a desire of holidaymakers to make sure they get a break next year after this summer’s plans were thwarted. Prices for summer 2021 are also higher, the CEO said.
The reinstatement of some travel restrictions to reflect new virus surges hasn’t led to a lot of cancellations, Joussen added. “We see customers going elsewhere. Those who said ‘I’m going on vacation,’ -- they really want to go and we have enough destinations that are open.”
TUI expects to end cash outflows in the quarter ending Sept. 30.
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