Tui, the travel group, reported a loss of 3.2 billion euros after the pandemic forced it to cut vacation programs and cruise routes across Europe and ask for help from emergency to the German government.
The tour operator said on Thursday it would increase cost-saving measures by an additional € 100 million to € 400 million to deal with the fallout from the crisis, which has pushed it into a virtual collapse.
Revenue for the year ended September fell 58% to € 7.9 billion, resulting in a pre-tax loss of € 3.2 billion, compared to a profit of € 692 million euros in 2019.
Last week it secured a € 1.8 billion financing deal from a consortium of investors, banks and an economic support fund backed by the German state.
As part of the financing of Tui’s largest shareholder, Russian businessman Alexei Mordashov will increase his current 25% stake in the company. This is the third funding supported by Tui’s government since the start of the crisis.
The group had 2.5 billion euros in cash on its balance sheet at the end of November.
Tui, which has a fleet of around 150 planes and 10 cruise ships, has struggled more than nimble online rivals such as Love Holidays and On The Beach to deal with the fallout from the frequent evolution of travel advice and negative repercussions on consumer confidence. resulted in vacation cancellations.
But the group said Thursday that demand for travel next summer is increasing and that 50% of its schedule for May 2021 has been booked. Next year’s average summer vacation prices are 14% above 2019 levels.
He added, however, that 2021 would be a “year of transition” and that travel would not return to pre-covid levels until 2022.
Fritz Joussen, managing director of Tui, said the group was “ready for a swift and successful resumption of travel activities as soon as the lockdowns are lifted and the destinations reopen. The prospect of vaccinations at the start of the year will considerably increase the demand for summer vacations in 2021. “