MIAMI – TUI Group has reported a full-year earnings loss of €3bn before interest and taxes (EBIT) due to the COVID-19 pandemic crisis. The travel operator also suffered a 58% fall in its revenue, recording a profit of €7.9bn.
During October 2019 and February 2020, the group was “very successful.” However, after the first five months of the 2020 financial year, the situation completely changed for the Group as the pandemic took its toll in the industry. As a result, the company cut all travel activities amid the now familiar worldwide travel restrictions.
With this balance sheet on the table, the group has secured a government bailout for the third time this year. This amounted to a further €1.8bn from the financial support package granted by government fund WSF. Previously, the company had received €1.8bn and €1.2bn, respectively, from state-owned development government bank KfW.
As a result, the group current liquidity amounts to €2.5bn in cash. To face the next years in a post-COVID-19 world, it also increased its long-term annual cost-cutting goal from €300m to €400m. The Group has already cut 8,000 jobs to begin to reach this goal.
2021: A Transition Year for the Industry
According to the company, 2021 will be a “transition year” for tourism as pre-pandemic travel levels are expected to return in 2022. On this, TUI Group CEO Fritz Joussen said that the conglomerate is ready for a 2021 Summer holiday season with a “significantly” increased demand.
Joussen has the numbers to back him up. The group said that 50% of its holiday program for May 2021 had already been “booked.” Additionally, the average ticket price is 14% higher and so bookings are up 3% in comparison to Summer 2019.
The company expects a “speedy and successful resumption of travel activities” once travel restrictions are lifted. In the meantime, Joussen sounds confident when he says the group is “prepared for a new start after the crisis.”
Featured photo: TUI Airways Boeing 787-8 Dreamliner. Photo: Thomas Saunders.