(Alliance News) - Tui AG on Wednesday touted surging revenue in its third quarter as 2022 summer travel bookings came close to 2019 levels as the Anglo-German tour operator expects to become profitable in the full year.
In its third quarter ended June 30, revenue soared to EUR4.43 billion from EUR649.7 million a year ago. This was 6.7% lower than the EUR4.75 billion the Hanover-based firm reported for its third quarter of 2019.
Its Market & Airlines unit revenue rebounded to EUR3.90 billion from EUR546.8 million a year ago, but was still below the EUR4.00 billion in the third quarter of 2019.
Tui was still loss-making due to disruptions at airports.
The underlying loss before interest and taxes narrowed sharply to EUR27.0 million from EUR669.8 million. Tui noted that it was still not profitable due to EUR75 million in costs resulting from travel chaos at airports. The company noted that without the disruption, underlying Ebit would have been at EUR48 million.
The company added its current summer booking levels are at 90% of that of summer 2019, with July and August at 93%. Further, 2022 average prices are "significantly higher than 2019," Tui explained.
"People want to travel. Holidays continue to top the list of planned spending – this has not changed. Although the entire European airline sector continues to face challenges, we have successfully ramped up our business with a significant increase in demand and achieved a good third quarter," Chief Financial Officer Sebastian Ebel said, who will become chief executive on October 1, replacing Friedrich Joussen.
The tour operator expects to report a profitable Ebit for the financial year ending September 30. It would be Tui's first profit since the start of the Covid pandemic. In its financial year 2019, it posted a pretax profit of EUR691.4 million, down 28% from EUR965.8 million a year prior.
In July, Tui said it paid back EUR671million in German government aid it needed due to the Covid pandemic but still has to pay back three other state aids totalling EUR2.6 billion, namely Silent Participation I, warrant bond, and credit lines.
The conditions of Tui's Covid aid from the German government included a suspension of dividends until it pays back the support. The Hanover-based Anglo-German holiday operator last paid a dividend of EUR0.54 in respect of its 2019 financial year.
Tui shares fell 1.2% to 141.70 pence each on Wednesday morning in London.
By Tom Budszus; tombudszus@alliancenews.com
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TUI AG (TUI)