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Sumamry
- TUI Group expects a strong summer season this year provided the travel restrictions are eased.
- Summer prices were up by 22 per cent on average for this year, said the firm.
- The group had a liquidity of €1.7 billion on 7 May.
Travel firms are the most affected lot of coronavirus crisis, which is now becoming evident from their financial results. One of the prominent names in the sector TUI AG (LON:TUI) posted a net loss of €1.49 billion for H1 2021 (six months to 31 March 2021), down 83.8 per cent as compared to H1 2020. The group’s revenue was €716.3 million for the half-yearly period for FY21, down 89 per cent over the same period last year as a result of coronavirus related travel restrictions across the firm’s key European markets.
However, the group expects improvement in the second half of the year as the travel sector begins to reopen gradually. TUI said that the summer prices were already higher by 22 per cent on an average with more packaged holidays booked compared to the previous year.
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Britain and Germany were the top two main markets for the TUI group. Right now, popular European destinations like Spain and Greece are off the UK’s ‘green list’ that required no need for a quarantine period as travelers returned to Britain.
The company’s share price (LON: TUI) was down 2.92 per cent to GBX 415.10 at 1.04 PM on the London Stock Exchange. The German travel company’s market capitalisation was recorded as £4.7 million.
Also Read: TUI AG (LON:TUI) Resurging from Lower Levels, Will This Momentum Continue?
Reopening plans
The travel firm said that its reopening programmes would be concentrated on regions with low incidences of coronavirus cases along with appropriate vaccination rates. These would include the areas such as the Balearics, the Canaries the Greek islands, and Portugal.
TUI’s bookings for coming winter months were up 17 per cent and for next summers by a whopping 293 per cent.
Uncertainty over the spate of travel restrictions across Europe had affected the summer season bookings of TUI, which were down by 69 per cent versus same period two years back. The group informed that its cruises would restart in phases from the month of May itself.
The company statement said that TUI wished to return to a gross leverage ratio target of less than 3 times as the leisure travel sector recovered during the next half of the year.
Also Read: Lens on Travel Stocks as Airline Chiefs Call to Restart US-UK Travel
Financial Highlights
- The firm’s net debt rose to €6.8 billion as of 31 March 2021, up 39 per cent from the same time last year.
- The TUI group had a liquidity of €1.7 billion as of 7 May, providing some relief at least in the short term.
- On a positive note, the group is expected a return to 75 per cent of its annual capacity in FY21 as compared to FY19. However, this assumption relied majorly on the easing down of the travel related restrictions.
- A total number of 2.6 million customers had booked with the travel firm for summer 2021 season. The firm took 23 million people on holidays before the pandemic struck in 2019.
- The firm expects to achieve nearly 50 per cent of its planned €400 million annual cost savings by the end of FY21.
- The company expects to make profits in the last quarter of this financial year, as travel normalises.
