17th Jun 2020 14:08
(Alliance News) - TUI AG on Wednesday said it continues to reposition the company in the wake of the coronavirus pandemic.
The FTSE 250-listed travel company said a comprehensive restructuring plan for the French regional entity has been presented.
In future, TUI France will focus on high-margin business with a few core brands. Offers that are high-volume but do not generate sufficient margins are expected to be removed from the portfolio, TUI said.
As a result, TUI France's business volume will decline. In addition, in France, the company's own distribution network of 70 travel agencies is to be sold or closed. TUI said the project foresees a reduction of 583 jobs, in the scenario of the closing of all own retail shops, which is about 60% of the current TUI France staff base.
This plan should then enable TUI France to break even from 2021 onwards, the company noted. TUI France was already loss-making before the pandemic.
In May, TUI said, as a consequence of the coronavirus crisis, all business operations would be reviewed in order to steer the company as a whole safely through the crisis and provide it with a stable future. Subsidiaries and regional entities that had been loss-making in recent years will be restructured, the company highlighted.
Overall, TUI said it aims to reduce its overhead cost base by 30% worldwide. The restructuring of TUI France is a step towards making TUI more competitive and then emerging from the crisis stronger.
TUI shares were trading 0.4% higher in London on Wednesday at 467.86 pence a share, while in Frankfurt, the stock was up 0.5% at EUR5.27 a share.
By Evelina Grecenko; [email protected]
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