Tui Airways mitigates Covid-impact by dropping wet leases

Tui Airways has been able to mitigate the impact of the Covid-19 pandemic and resulting travel restrictions by dropping its wet lease agreements and negotiating on its orders of the grounded Boeing 737 Max.

The airline took on about 100 former Thomas Cook Airlines pilots when its rival went out of business last autumn – but had to lease rather than buy aircraft in order to expand its programme.

Managing director Dawn Wilson explained that Tui was able to negotiate with aircraft leasing companies so that it was not paying for aircraft it was not using this summer, which will be a vastly reduced schedule of flying compared with 2019.

She added: “Stopping the wet leases meant we could reduce our fixed costs really quickly.

“We will pretty much fly our short-haul aircraft this summer. There will be work for all the short-haul aircraft and we will look to focus on the slow restart of our long-haul routes.”

The Boeing 737 Max has been grounded since March 2019 following two fatal crashes attributed to problems with the aircraft’s computerised systems.

Tui struck an undisclosed compensation deal with Boeing to offset the cost of the grounding of the 737 Max earlier this year, which will be paid over the next two years.

“We were expecting more deliveries of the Max that haven’t come because it’s been grounded,” added Wilson. “So that’s been another area where we’ve been able to mitigate the impact.”

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