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Unrest in Egypt and Russia Widens Losses at European Tour Giant TUI Travel

May 13, 2014 8:30 am

Skift Take

While TUI wan’t as bad off as Thomas Cook 18 months ago, it still hasn’t made the changes necessary to better weather unrest or late holidays.

— Jason Clampet

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People and security officials walk and look as smoke rises from a tourist bus in the Red Sea resort town of Taba in the south Sinai, February 16, 2014. Reuters

TUI Travel Plc, Europe’s largest tour operator, said its first-half loss widened 3 percent on the timing of Easter holidays and as it served fewer guests due to political unrest in Egypt.

The underlying operating loss was 298 million pounds ($503 million) in the six months through March, Crawley, England-based TUI Travel said in a statement today. Sales fell 4 percent to 5.19 billion pounds. When excluding the effect from a later Easter, which occurred in April this year, the adjusted loss narrowed 4 percent to 277 million pounds.

“Demand continues to grow for our unique holidays and we have seen strong growth in online bookings, a key element of our digital transformation,” Chief Executive Officer Peter Long said in the statement. “We are pleased with summer 2014 trading, against strong comparatives.”

TUI is focusing on cutting costs and selling vacation packages directly to customers as Europe emerges from the longest recession since introducing a common currency. Unrest in countries including Egypt and Russia contributed to an 8 percent drop in customers at the company’s mainstream business, which excludes adventure and sports excursions.

TUI Travel reiterated a forecast to raise underlying operating profit by 7 percent to 10 percent this year excluding currency shifts. The first-half net loss widened to 273 million pounds, from 266 million pounds a year earlier.

The stock has returned 32 percent in 12 months, while shares of Thomas Cook Group Plc, its largest competitor, rose 50 percent.

To contact the reporter on this story: Richard Weiss in Frankfurt at rweiss5@bloomberg.net. To contact the editors responsible for this story: Benedikt Kammel at bkammel@bloomberg.net Thomas Mulier

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