Tui reduces loss to £135m but warns of threat posed by soaring fuel prices and cost-of-living crisis
Travel firm Tui has posted a €153m (£135m) loss for the final three months of 2022 as the German company warned of potentially tougher times to come.
The Hanover-based firm said the cost-of-living crisis could see demand for its holidays to fall as cash-strapped Europeans cancel trips abroad.
Tui warned that the war in Ukraine had caused fuel prices to surge, in a shift that had increased the cost of jet plane bunker fuel.
The travel conglomerate said that while the impact of Covid had begun to drop off, the global downturn threatened its business.
Tui’s loss announcement came a day after Leeds firm Jet2 took Tui’s place as the UK’s largest tour operator, after selling holidays to 5.9m people in the year ending in September 2022.
Tui meanwhile saw its losses reduce year-on-year from €273.6m in the period running from October to December 2021 to losses of €153m in October to December 2022.
The reduced losses came on the back of the recovery of its business since Covid-19 that saw an uptick in bookings in almost all segments apart from its tourist attractions divisions, Tui Musement.
The higher bookings saw Tui’s revenues increase by 58.3 per cent to €3.75bn.
The German, firm however, blamed its losses on the “seasonality of the tourism business” as it continued to hold back on paying out a dividend.
Commenting on Tui’s results, Richard Hunter, head of markets at Interactive Investor, said that while the German firm has “not yet reached its preferred destination of profitability… the damage wrought by the pandemic is slowly being undone.”
Hunter said the “direction of travel” remains “promising” as he noted Tui expects its full-year earnings to increase “significantly”.
He however noted that Tui still has to navigate a series of “issues” including labour shortages, inflationary pressures, and competition from low-cost rivals.