Tui secures extra €1.8bn bailout to ‘bridge gap’ until Covid recedes

Tui has succeeded in securing a third bailout of the pandemic from the German government to “bridge the gap” until Covid recedes.

Berlin granted Europe’s largest travel group an extra €1.8 billion as it strives to recover from the economic impact faced by the global travel industry since the virus stifled activity in March.

The company has already received €3 billion in state aid from Germany, bringing the total to €4.8 billion (£4.3 billion).

Tui had financial resources and credit facilities of €2.5 billion, including the newlly agreed financial package, as of November 30.

The family of Russian billionaire Alexey Mordashov, a 25% shareholder in Tui, has made a long-term strategic investment and will participate in the bailout with its company Unifirm emerging as the group’s largest single shareholder with a 36% stake.

Confirming the widely anticipated fresh financial aid, Tui said it was “taking further precautions in view of the rising number of infections since autumn, strict travel restrictions in many countries and the resulting shorter booking times of customers”.

The financial package “is intended to ensure that the company can bridge the gap if the pandemic persists in 2021”.

The group added: “Following the first reports of vaccine successes, Tui expects the pandemic situation to improve in the course of the first half of 2021 and a greater return of holiday travel.”

Tui expects a “significant reduction” in travel restrictions due to the imminent availability of vaccines against the virus.

“Holidays continue to be a  high priority for our customers, and we continue to work on different demand scenarios for the coming seasons,” the company added.

Tui Group chief executive Fritz Joussen said: “Before the corona pandemic, Tui was a very healthy company. The market is intact, the demand is there.

“But we have not been able to generate any significant revenues since March.

“Our integrated business model allows us to react very flexibly to short-term changes in the pandemic situation, just as we successfully ramped up our travel programme for a few weeks in July after the first wave.

“People want to travel, tourism remains a growth industry and an important sector for stabilising the southern euro area.

“The financial package provides the security to look consistently ahead and to prepare the group strategically and structurally for the time after the pandemic.

“With these measures, the group is securing liquidity for a continuing pandemic in 2021, while at the same time improving our balance sheet structures in the long term.

“The overall package of different financing from various partners shows the broad confidence of all parties involved in the future of tourism and the Tui Group”.

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