Only the CEO of the world's largest tour operator could see the upside in rising oil and gas prices, as Fritz Joussen warns there won't be any cheap deals to be had this year.
Holiday group TUI said on Wednesday it expects to become profitable again in 2022 with significantly positive underlying core earnings thanks to strong bookings as countries lift pandemic-related travel restrictions.
At the same time, it expects the recovery of the Covid-hit holiday sector to be lasting as oil and gas prices should eventually normalize, CEO Fritz Joussen said in a conference call.
“We are talking about oil price levels of $105-110 per barrel. And historically, I have not seen such pricing levels to last very long,” Joussen said.
“I think there might even be upside potential if oil and gas prices normalize because they are the driver of inflation today,” he added when asked if consumer worries about rising costs of living might put an end to the soaring demand.
He also said that price increases — in part coming naturally from higher demand making offers scarce as people have started to book longer holidays — should cover the fuel costs.
“There will be practically no last minute offers at low prices this summer,” Joussen said.
He also said he expects TUI’s capacity to almost reach the pre-crisis level of 2019 this year.
Germany-listed shares in TUI were up 2.7 percent at 0800 GMT.
In the second quarter, TUI’s underlying loss before interest and taxes (EBIT) narrowed to $347.95 million, almost halving the loss of $668 million it reported for the same period last year.
TUI also said it generated sales of $2.23 billion in the second quarter of its 2022 financial year starting in October — nine times as much as in the second quarter of 2021 — as people jumped to travel once it became possible again.
It last posted a profit in 2019.
(Reporting by Zuzanna Szymanska, editing by Kirsti Knolle and Kim Coghill)
Photo credit: TUI expects capacity to almost reach the pre-crisis level of 2019 this year. TUI