Tui to raise €1.1bn as travel restrictions ease

Tui is to raise €1.1 billion to bolster its balance sheet as travel starts to emerge from the worst effects of the pandemic.

Europe’s largest travel group reported UK winter bookings “trending strongly” after the September 17 government update on travel rules.

Overall summer 2022 bookings are up 54% over pre-pandemic summer 2019.

Tui said: “We believe many customers will continue to want to secure their summer holidays in advance, with Turkey, Florida, Greece, and Cyprus the most popular destinations at present.

“With the strong indications of pent-up demand, we believe summer 2022 volumes will likely recover close to normalised levels of summer 2019.”

Early sales Marella Cruises sales for summer 2022 are “well positioned”, supported by both rebookings and new bookings.

The capital increase will give the company €4.5 billion in cash and available facilities. The aim is to cut interest costs and debt.

Tui Group chief executive Fritz Joussen said: “The offering will enable us to take a significant step forward, increasing our ability to take advantage of the business opportunities resulting from the easing of Covid-19 restrictions.

“It will provide us with a capital structure more appropriate for more normal operating conditions.”

Tui reported 5.2 million bookings across its summer 2021 programme, up by 1.1 million on its last update in August.

For the peak summer, Tui operated 42% of capacity in July and 48% in August as it handled 2.6 million holidaymakers, double the level in the same months last year.

But UK departures have remained “largely subdued” with a nearly unchanged traffic light system limiting the return of popular destinations such as Turkey, Egypt and the Dominican Republic.

“As a result, we now expect to operate a capacity for peak summer period – July to October – of between 50% and 60%,” the company disclosed.

Bookings for the four month summer period are currently 49% of pre-pandemic 2019 levels with overall bookings down 63%.

However, Tui added: “The recent announcement on 17 September 2021 by the UK government to adopt a similar travel framework as our European markets is a clear step to further reopening international travel for our UK customers.

“With a very notable pick-up in UK bookings over the most recent weeks since the announcement, particularly for our winter 2021-22 programme where we have seen UK daily bookings trending strongly, we are confident this will enable a stronger return for the UK market in the coming months.”

Winter bookings are at 54% of 2018-19 levels.

Tui said: “With travel restrictions now largely lifted for short and medium-haul winter destinations in our key markets, and supported by the increasing vaccination rates of the EU and UK adult population, we expect a wider return to international travel this winter.

“Subsequently we expect capacity will be significantly better than the previous winter 2020-21 season and we would at this stage plan to operate between 60% to 80% of a normalised programme, with long-haul destinations expected to recover more slowly.

“In general, our integrated model and own long-haul fleet means we are agile enough to flexibly adjust plans in the short-term, to both meet demand and to ensure a range of attractive winter destinations are available for our customers.

“Canaries, mainland Spain, Egypt and Cape Verde are likely to form the bulk of our holiday offer this upcoming winter and we will aim to drive high load factors on these popular routes.”

The operator reported a “very encouraging” pipeline of 1.6 million bookings for summer 2022, an increase of 326,000 since its last update.

This has been driven by a mix of re-bookings and new bookings, “reaffirming the strong intention to travel and appetite for Tui holidays”.

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