TUI to reap profits in 2022 following summer travel boom
TUI expects to become once again profitable in 2022 due to the expected boom in summer travel demand.
In the second quarter of FY22, the holiday group’s losses before interest and taxes narrowed to €329.9m, down 47.8 per cent on the same time last year, while group revenues went up 9.5 per cent to €2.1bn, nine times higher than in 2021.
“The high demand for travel and the good business performance now confirm our forecasts,” said chief executive Fritz Joussen in a statement. “2022 will be a good financial year with a strong travel summer.”
“After two years of crisis, things are clearly progressing and we expect to become profitable agains in the current financial year with a significantly positive underlying EBIT. This is the basis for new growth.”
While in the second quarter of FY22 the group’s capacity reached 71 per cent on pre-Covid levels, moving forward capacity will reach levels above 2021.
TUI said 1.9 million customers travelled over the second quarter at a 84 per cent load factor, as bookings across key markets were not affected by the war in Ukraine.
Summer booking are currently at 85 per cent of 2019 levels, with the UK bookings – 11 per cent up on pre-Covid levels – driving the growth.
Joussen told analysts today that summer prices will remain strong and offset the higher fuel costs and inflation rates.
“[Summer prices] are more than necessary to cover fuel costs and inflation,” he said. “I think the scarcity will provide the basis of an environment where we don’t need to yield down on prices.”
Despite the positive results, the company said it could not issue a specific forecast for 2022 as the impact of both the pandemic and the war in Ukraine remains difficult to predict.
“The greatest area of uncertainty will be the impact on consumer confidence, should travel restrictions be reintroduced, should there be further cost inflation volatility and/or an escalation of the war in Ukraine,” the company added.