Tui downgrades FY profit outlook, cites Iran war

(Sharecast News) - Tui downgraded its full-year profit guidance on Wednesday, citing the Iran war.

The travel company now expects underlying earnings before interest and tax for FY 2026 of between €1.1bn and €1.4bn, having previously expected a 7% to 10% increase on 2025's €1.4bn. Tui also said it was suspending revenue guidance until conditions stabilise, having previously guided to growth of 2% to 4% on 2025.

The company said it expects to report a "strong" operational second-quarter performance, with underlying EBIT up by €5m to €25m on the same period a year earlier. This is driven by the benefits from the transformation of Markets + Airline despite absorbing around €40m from the Iran war in March, including repatriation efforts and related operational disruptions.

Looking ahead and the outlook was more downbeat, as Tui said "the ongoing conflict in the Middle East and the uncertainty surrounding its duration continue to limit near-term visibility and drive consumer caution".

In its Markets + Airline and Hotels & Resorts segments, Tui said the geopolitical situation has led to a partial shift in customer demand from Eastern to Western Mediterranean destinations, with customers showing increased caution and booking closer to departure dates.

As a result, Markets + Airline booked revenue for summer 2026 is currently down 7% on the previous year, while hotel occupancy has softened further and is 7% below the prior year for the second half.

"This development is driven by the impact of the Iran war particularly in Türkiye, Cyprus, and Egypt, as well as by the aftermath of the hurricane in the Caribbean," it said.

"Despite the volatile geopolitical backdrop, TUI remains well positioned," it said. "The group's strong financial position and robust balance sheet provide flexibility to navigate the current environment while executing its strategic transformation."

It said the guidance revision is based on current trading conditions, assumes no material escalation in geopolitical tensions, and that fuel supplies can be maintained.

"Management continues to closely monitor developments and their potential implications," Tui said.

At 1040 BST, Tui shares were down 2.6% at €7.01.