Germany-based tourism group TUI recorded an adjusted operating profit (EBIT) of minus €699 million euros (846 million US dollars) in the first quarter of its fiscal year ending December 2020, the company announced on Tuesday.
During the quarter, the German travel and tourism company further pursued cost discipline and liquidity-strengthening measures initiated before the pandemic to limit loss, and therefore saw its monthly cash outflow at an average of around €300 million between October and December, lower than between €400 and €450 million it had expected.
“With strict cost discipline and the realignment of the Group, which is being driven forward at full speed, we succeeded in reducing the loss in the past quarter,” said Fritz Joussen, chief executive officer (CEO) of TUI Group, in a statement.
Revenues in Q1 reached €468.1 million despite significant travel restrictions and worldwide lockdowns. TUI noted that the Canary Islands were among the “few destinations accessible to holidaymakers.”
In Q1 last year, which was not affected by the pandemic, TUI recorded revenues more than eight times as high at €3.85 billion.
Due to the ongoing pandemic, TUI agreed on a third Covid-19 financing package together with shareholders, banks and the Economic Stabilization Fund (WSF). The package worth €1.8 billion was concluded in the last week of January. At the beginning of February, TUI still held cash and cash equivalents of €2.1 billion.
“Despite the current uncertainties due to the rapidly changing pandemic situation, demand for summer holidays is good,” TUI noted.
The travel company recorded a total of 2.8 million bookings for summer 2021, around 56 per cent of bookings at the same time for summer 2019. Prices were on average 20 per cent higher compared to pre-crisis level of summer 2019.
The Covid-19 vaccination campaigns that began were an important prerequisite for the resumption of tourism in the summer of 2021, TUI noted.
“The more determinedly the vaccination campaigns are implemented, the faster we can return to true freedom to travel,” said Joussen. In particular, “the English market has a special significance for our company” and the vaccination campaign in the country was carried out at an “impressive pace.”
(1 euro = 1.21 U.S. dollars)