Tue, 13th Aug 2019
Travel company Tui has reported that profits for the last quarter fell by 46% after the company saw a dip in bookings last year thanks to the heatwave, as well as ongoing Brexit concerns. It also noted that it had been hit by hefty costs relating to the issues with the Boeing 737 Max.
Tui has already issued two previous profit warnings recently, which were also attributed to the grounding of the 737 Max. It stuck to its full-year guidance in its recent report, forecasting that underlying earnings this year will be around 26% lower than last year.
Earnings for the three months leading up to the 30 June were EUR100.9 million, which was an 86 million drop compared to the previous year. It attributed the drop to the grounding of its 737 Max aircraft as Boeing was forced to stop the aircraft from flying due to two fatal crashes. Tui has been forced to lease replacement aircraft because its fleet includes 15 737 Max planes, and they had put in an order for another eight as well.
Summer bookings are down by 1%, as customers were tempted to stay at home hoping for a repeat of the heat wave seen last year. Many holidaymakers are opting for destinations such as Turkey or North Africa, which has left Tui with excess capacity in Spain, and a lack of interest in the destination thanks to the ongoing uncertainty as to when, and how, Brexit will take place.