Tui Group unveils €250 million ‘cost-reduction’ plan

Tui Group is aiming to save €250 million by 2028 through cost-cutting in its ‘markets and airline’ division, the company has revealed.

Chief executive Sebastian Ebel outlined details of the “cost-reduction programme” while sharing the group’s results for the 12 months to September 30.

Of the savings, 60% is intended to come from “overhead cost reductions” and the remaining 40% will come from “operational excellence".

Asked about any impact on the workforce, Ebel said: “It’s important to differentiate between cutting the workforce and having fewer people.”

He insisted the group “will not have fewer people”, adding: “Our workforce is changing and we’re getting more efficient and we have opportunities from that which have a significant amount of savings.”

Giving an example of where savings will be made, he pointed to the number of external IT developers.

“We had a big workforce of external IT developers, which will reduce to an absolute minimum,” he said. “We are over the peak of IT investment in transformation, so [that means] significant cost cutting.”

He said costs would also be saved with the expected upcoming delivery of 20 Boeing aircraft in 2026.

Further costs will be saved by “optimising the search spend”, he said.

Arguing that a “very stringent programme” would be rolled out, he said: “It’s important we do it with our people and not against our people.”

He added: “We are growing on the hotels side and with Musement. We have efficiency programmes in one area and we are growing in other areas.”

The group aims to achieve 30% of its savings target by 2026, 60% by 2027 and 100% by 2028.