Tui is reeling in a surprise profit on bumper demand

  • Tui made an operating profit of €6 million, despite expectations of a loss of €102 million
  • First-quarter profits rose from a loss of 153 million euros a year earlier as travel recovered

Tui smashed first-quarter expectations as it turned profitable on the back of strong travel demand.

Europe’s largest travel company reported operating profits of €6m (£5.1m), despite expectations of a loss of €102m for the period, according to London Stock Exchange Group data.

The Hanover-headquartered company, which recorded a loss of 153 million euros in the first quarter of last year, also maintained its forecast for a 25 percent growth in operating profits in 2024.

Europe's largest travel company reported operating profits of €6m (£5.1m) versus a loss of €153m (£130m) in the same period last year.

Europe’s largest travel company reported operating profits of €6m (£5.1m) versus a loss of €153m (£130m) in the same period last year.

TUI also set a medium-term target of a compound annual growth rate of 7 percent to 10 percent.

Airlines across Europe are enjoying more positive trading conditions after Covid-19 brought performance to a halt over a tumultuous few years.

But travel demand is expected to exceed pre-pandemic levels despite economic uncertainty, delays in aircraft deliveries from manufacturers, and higher jet fuel prices.

Tui boosted higher prices and bookings, which helped raise its profits in the aforementioned period, as the company saw 3.5 million passengers, compared to 3.3 million passengers in the same quarter last year.

“People’s desire to travel remains high, despite the still difficult market environment,” said Sebastian Ebel, head of Tui. Thus we are creating the foundation for Tui’s profitable growth in the future.

The first quarter is usually the weakest for airlines with bookings being at their lowest in the first three months of the year.

Commenting on the results, Sophie Lund-Yates, senior equity analyst at Hargreaves Lansdown, said: “TUI reports record sales as resilient consumers take to the air.

“A lot of the operational work TUI has done means it is better placed to meet this demand.

The effort to expand the upscale offerings in its hotel portfolio is a smart move and could help it stay competitive if lower-income earners start to back away from booking vacations.

There are questions surrounding TUI’s potential decision to abandon its London listing. The added complexity and cost of maintaining dual listing since Brexit has led others to make a similar decision. While this changes little for business, the landscape for London is far from ideal.

On Sunday, it was reported that the efforts TUI has been hit hard by the London stock market defection After two shareholder advisory groups supported its decision to leave.

The travel company’s executive and supervisory boards recommended that shareholders vote to delist the company from the London Stock Exchange at its annual general meeting on Tuesday.

The company said having a single German listing could better reflect its ownership and trading patterns, which could be a blow to the UK market.

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(tags for translation) Daily Mail

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