Tui bookings for this summer are down by 81% and capacity for future seasons has been adjusted to reflect the impact of gradual recovery from the Covid-19 pandemic.
This equates to its programme being 16% sold, reflecting the impact of cancellations from mid-March, versus 88% sold at the same point last year.
“Rebased on our adjusted capacity plans, we are currently 57% sold to date,” Tui said.
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The first operator to partially retstart holidays in June is cutting winter capacity by 40% in line with overall bookings – with numbers from the UK down by 5%.
Capacity adjustment
Capacity for summer 2021 has been “cautiously adjusted” by 20% with flexibility built in to make further changes.
Tui said: “Bookings are currently up significantly as customers both rebook holidays from this summer and look to secure new holidays early.
“Bookings for summer 2021 are consequently up 145%.”
Tui’s three cruise operations remained suspended throughout the quarter, adhering to both German and UK government advice on cruising.
More than half of 50% of the group’s hotels worldwide have reopened while short cruises in Europe were relaunched this month from Germany.
The shift to next year came as Tui Group disclosed a €1.1 billion loss for the three months to June 30. The underlying compared to a profit of €102 million in the same period last year.
Overall losses for the nine months from October 2019 hit €2 billion, an increase of €1.8 billion over the same corresponding period.
The figure reflects underlying costs of €1.3 billion from business suspension since March, impairments triggered totalling €410 million and net costs from “ineffective” fuel hedges amounting to €189 million.
Europe’s largest travel group expects to be “broadly operationally cash break-even” for the current quarter based on present restart operations
The forecast came the day after Tui secured further German government state aid worth €1.2 billion to support winter 2020-21 “and thereafter”.
‘Global realignment’
Group-wide annual costs are being cut by 30% in a “global realignment” by the company .
“A comprehensive review of our activities across every business unit and group companies worldwide to identify benefits and savings has been triggered,” Tui said.
“We are targeting a permanent annual saving of more than €300 million with the first benefits expected to be delivered from FY21 and full benefits to be delivered by FY23.
“Tui Group will emerge stronger, leaner, more digitalised and more agile, in what is likely to be a much more consolidated market.”
Tui sees the 2020-21 financial year as a period of transition with a further ramp up in bookings as more destinations reopen and consumer confidence returns.
The company plans to “accelerate digitalisation initiatives, deliver global realignment cost reduction programme” and return to profitability.
Tui said it was well positioned “to emerge from the crisis as an even stronger market leader due to its trusted brand and differentiated products” in the 2021-22 financial year.
That period will see the first synergies from global realignment realised, benefits from digital accelerations and platform harmonisations and a return to pre-crisis booking levels with subsequent growth.
“Our priority will be rebuilding a robust financial profile. The group will now evaluate options to achieve the optimal balance sheet structure to support the business over the longer term,” Tui said.
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