TUI quarterly loss narrows on booking resilience despite Iran war
TUI Reports Improved Second-Quarter Performance Amid Geopolitical Challenges
By Joanna Plucinska
Second-Quarter Financial Results
LONDON, May 13 (Reuters) - TUI, Europe's largest tour company, posted a slightly narrower-than-expected second-quarter adjusted operating loss on Wednesday, with strong demand for cruise trips and the company streamlining its airline business.
Adjusted Operating Loss and Revenue Impact
The German travel major reported a loss of 188 million euros ($221 million) for the quarter ended on March 31, 9% lower than a year earlier, despite a 40 million euro hit from the Iran war that forced flight cancellations and ship rerouting. Analysts polled by LSEG had projected a loss of 194 million euros.
Industry-Wide Effects of the Iran War
Airlines across the industry have warned of the knock-on effect of the war that began on February 28, while tourists have started booking trips closer to home and more last-minute in order to avoid disruption.
Booking Trends and Strategic Shifts
Last-Minute Bookings and Destination Preferences
TUI highlighted the last-minute booking trend tied to the war in its results, adding that tourists were shifting away from holidays in the eastern Mediterranean towards the western Mediterranean.
Revenue Outlook and Pricing Strategy
Bookings for the second half of the year were strong, the company said, adding that higher prices were set to bolster the company's revenues.
CEO Statement on Resilience and Strategy
"The very strong results give us confidence for the second half of the year. Due to geopolitical challenges and dynamic operating conditions, this will require great dedication and flexibility," Chief Executive Sebastian Ebel said in a statement. He added that the airline would continue to focus on diversifying its product offering to stay resilient.
Future Guidance and Market Conditions
Profit Forecast and Revenue Guidance
The company confirmed its April outlook of an adjusted operating profit of 1.1 billion to 1.4 billion euros for the 2026 financial year.
Revenue Comparison and Cost Pressures
Second-quarter revenues were similar to last year at around 3.7 billion euros.
In April, TUI cut its profit forecast and suspended its revenue guidance for the upcoming fiscal year on the back of spiralling jet fuel costs and the uncertainty surrounding the war in the Middle East.
Additional Information
($1 = 0.8523 euros)
(Reporting by Joanna Plucinska, editing by Kirsti Knolle and Harikrishnan Nair)
