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TUI Travel raises $500 million in aircraft sale

TUI Travel is to sell and lease back 19 of the 28 aircraft it owns in a deal that will raise $526 million.


The deal includes aircraft currently flown from the UK by Thomsonfly.


This will give Europe’s biggest travel group greater flexibility in the use of aircraft amid increasing economic uncertainty, with TUI already planning a 12% reduction in capacity for next summer – equivalent to taking out 10 aircraft.


Cash from the sale to leasing company AerCap Holdings will be used to cut the group’s £900 million debt. However, the sale will lead to a write-down in the group’s assets and a paper loss of $155 million due to a fall in the value of aircraft.


TUI Travel is the parent company of TUI Travel UK and 51% owned by the German-based TUI group.


The sale is in line with the policy of TUI Travel chief executive Peter Long not to own aircraft. Long previously headed First Choice which merged with TUI last year. TUI Travel already leases the other 156 aircraft it operates. The 19 aircraft will be on operating leases of between one and seven years.


The group said the deal would have no impact on talks with Lufthansa on a potential merger in Germany of TUIfly and Lufthansa-owned low-cost carrier Germanwings.

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