New York, Hanover Travel company Tui has suspended most of its operating business due to the corona virus until further notice. Vacation packages, cruises and hotel operations are also affected. So wool Tui “Contribute to the global efforts of governments” to mitigate the consequences of the spread of the Covid 19 pathogen.
Tui is also withdrawing its forecast for the current financial year. The management board refrains from making a new forecast, as the group said on Sunday evening.
“We are taking drastic cost measures to mitigate the impact on our bottom line,” said Tui. “In addition, we decided to apply for government guarantees to support the company until normal operations can resume.” According to the information, Tui currently still has funds and available credit facilities of around 1.4 billion euros.
Tui is not the only company that is considering state aid. Lufthansa also wants to talk to governments about possible support, should this become necessary. This also means liquidity support.
Only on February 11, CEO Friedrich Joussen presented the forecast for the 2020 financial year. The CEO was still expecting adjusted earnings before interest and taxes of up to EUR 1.05 billion. Even if the outlook was modest, Joussen was positive about the future. Bookings for the summer are very good, said Joussen.
The travel group also suffers from the Boeing 737 Max flight ban Boeing-Debakel affected first quarter results. Adjusted earnings before interest and taxes fell from minus 83 million to minus 147 million euros. Losses in the poor first quarter are typical of the industry. But the expensive replacement for the Boeing 737 Max added a burden of 45 million euros.
Short-time work possible soon
Joussen had announced examinations last week where, given weak demand, capacities had to be shut down and savings could be made. The company had also retrieved a ship from Asia and canceled several cruise trips. Tui Germany is also in talks with the general works council on the introduction of short-time work. “The aim is to enable timely introduction,” said a spokesman.
“In the currently rapidly changing environment, the safety and well-being of our guests and employees around the world remain of paramount importance,” said Tui, explaining the drastic steps at the beginning of the week. This was decided according to the guidelines of various governments. The group had previously canceled the travel program to Spain by March 27. At first it was not known what the suspension of large parts of the company meant for customers.
Regarding the cruise business, Tui Cruises had initially stated that it was not an option to stop it completely. The cost of some canceled trips would be automatically reimbursed to customers. Where necessary and possible, the routes would be adapted to other ports. Previously, the Rostock cruise line Aida Cruises discontinued all cruises until early April due to coronavirus spread. According to the Financial Times, a hiring freeze is also planned.
Joussen had said that Tui was preparing its customers and employees for potentially longer-lasting consequences of the virus crisis. Of course, this also included cost-cutting measures: “It is already the case that we are putting back investments that we had planned.” Non-priority projects are to be pushed back.
With agency material.
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