TUI Reports $2 Billion Loss as Omicron Restrictions Slow Rebound

TUI reported an operating loss of over 2 billion euros ($2.26 billion) for its 2020-2021 financial year and said it may need to cut winter capacity as the Omicron coronavirus variant overshadows hopes of a rebound next summer.

The world’s largest holiday company has struggled since pandemic restrictions wreaked havoc on the tourism industry, leaving its hotels, airlines and cruises largely empty since March 2020.

It expects travel bookings to return to pre-pandemic levels by summer 2022 but the Omicron variant has prevented it from giving an outlook for the current fiscal year running from Oct. 1 to Sept. 30.

“It is clear that now in winter, due to the new variant, there will probably again be a reservation restraint,” Chief Executive Officer Fritz Joussen told a news conference on Wednesday.

Frankfurt-listed shares in TUI were down 4% by 0845 GMT.

TUI said it might have to limit its winter programme to the lower end of its guidance for 60-80% of 2019 capacity depending on the fourth wave of the pandemic and possible policy decisions due to the Omicron variant.

To survive the pandemic restrictions, the group has had to take German state aid and raise money through debt and equity including a recent capital increase of 1.1 billion euros.

Asked about the possibility of another capital increase, the CEO said “nothing can be excluded at the moment.”

However, mid-term earnings once the COVID-19 crisis ends should significantly exceed pre-pandemic levels, Joussen said.

“People want to travel and are willing to spend a relatively large amount of money on holidays,” he said.

The company, which owns travel agencies, hotels, airlines and cruise ships, said it was currently recording 4.1 million bookings for this winter and summer 2022.

($1 = 0.8859 euros) (Reporting by Yadarisa Shabong in Bengaluru and Zuzanna Szymanska in Berlin; Editing by Uttaresh.V and Rashmi Aich)

This article was written by Zuzanna Szymanska and Yadarisa Shabong from Reuters and was legally licensed through the Industry Dive publisher network. Please direct all licensing questions to [email protected].