Tui Group cut annual losses as a strong summer saw the number of holidaymakers handled return close to pre-pandemic levels.
Europe’s largest travel group achieved positive earnings in the peak summer quarter for the first time since the Covid crisis.
The number of summer customers at 13.7 million reached 93% of levels achieved before the pandemic.
More: Tui Group agrees to pay back €730m in Covid state aid
Underlying earnings [ebitda] for the three months to September 30 came in above €1 billion, excluding a €58 million impact from additional flight disruption costs. A pre-tax profit of €887 million was achieved in the summer three months.
“As expected, additional flight disruption costs remained at elevated levels but continued to reduce through Q4,” Tui reported.
Tui’s northern region, including the UK and Ireland, contributed summer quarter holiday experiences earnings of €344 million.
The company said: “All segments delivered a positive underlying ebit [earnings] in a quarter for the first time post-pandemic supported by the return to a more normalised travel environment and demonstrating the strength of our integrated business model and distribution power.”
Annual pre-tax losses were trimmed to €146 million from €2.5 billion in the previous 12 months as revenue soared to €16.5 billion, with €7.6 billion achieved in the summer, “reflecting the strength in demand and return to a more normalised travel environment”.
Tui reported that winter season bookings for the current year were running at 84% of 2018-19 levels.
The group projected that earnings for the next 12 months will “increase significantly” despite a backdrop of a continuing short-term booking environment and “considerable market uncertainty”.
Looking forward, the company said: “Our holiday experiences business strategy focuses on asset-right growth in differentiated content and expanding the customer base with multi-channel distribution.
“Having accelerated our strategic transformation of markets and airlines during the pandemic, and delivering the targets of our global realignment programme, our business strategy is now focused on profitable growth.
“This will be achieved by offering more product choice, growing our customer ecosystem into untapped segments, and increasing customer value.
“This includes increasing the volume and proportion of dynamically sourced packages, as well as significantly increasing our component offer in accommodation-only and flight-only.”
Chief executive Sebastian Ebel said: “We have surmounted the existential crisis, it’s behind us.”
He added: “Of course, we still have homework to do as a consequence of the pandemic, further cutting our debt, refinancing, strengthening the balance sheet. But our operational focus is set clearly on returning to profitable growth.”
Reflecting of the financial year, he said: “The first six months were still very much under the influence of the Covid restrictions. There is also Russia’s war of aggression against Ukraine. But in summer we got off to a great start. It was a strong summer season for us, especially in the fourth quarter.
“We are entering a new phase for Tui. The strategy is in place – and now we are going to implement it. We want to grow profitably again.
“Summer 2022 was very encouraging. Even though the restrictions were lifted late, our bookings were at a good 90% of the 2019 level, so almost the volume we had before the pandemic, while our average earnings were significantly higher. We can see the same trend for winter.”
He revealed that the group wanted to “rejuvenate” the fleet of UK cruise arm Marella.
The annual financial results came as the group confirmed plans to repay final Covid German state aid loans.