Tui Group is to receive a bridging loan from the German government worth €1.8 billion.
Funds from Germany’s state-owned bank KfW will be used to bolster Tui’s credit line as it battles the ongoing impact of the coronavirus crisis.
The loan has yet to be given final approval, and one of the conditions of the deal is that Tui waives dividend payments for the duration of the bridge loan.
Chief executive Fritz Joussen said: “The commitment of the KfW bridge loan is an important first step for Tui to successfully bridge the current exceptional situation.
“Our thanks go to the German Federal Government, the German parliament, the Government of Lower Saxony and KfW. They have acted quickly and in a solution-oriented manner in the interest of our customers, employees and the company.”
The group suspended all its holiday operations, including packaged tours, cruises, and hotel operations, earlier this month.
“Tui is a very healthy company,” Joussen added. “We were economically successful before the crisis and will be again after the crisis. Our business model is intact and we have over 21 million loyal customers.
“However, we are currently facing unprecedented international travel restrictions. As a result, we are temporarily a company with no product and no revenue. This situation must be bridged.”
Tui Group’s turnover for the 2019 financial year was $19 billion.
At the beginning of February, bookings for summer 2020 were 14% up year on year and followed a record January.