TUI UK & Ireland Managing Director Neil Swanson has warned that capacity increases by rival operators for summer 2025 could hit margins.
Jet2holidays has added 10% more seats this year and rival easyJet holidays has increased by 30%, but TUI’s overall capacity is similar to 2024.
“I am pleased that we didn’t increase capacity this year,” Neil told journalists at a media dinner. “Jet2 has increased; EasyJet has increased massively. We are broadly flat.
“There is a lot of capacity in the market. Everyone will sell what they’ve got to sell, but that will depress margins.”
TUI Airways does have 16 new routes this year and it has increased capacity on 33 more, but it has also reduced its risk by offering more flights with third-party airlines.
“Sometimes we can benefit from (scheduled airline) low seat prices,” added Neil. “Some of the prices at Easter are ridiculously low, and going into early summer as well. Our customers can benefit from that.”
Neil said TUI has booked 100,000 passengers on Ryanair flights since announcing a new deal with the low-cost airline last year.
While TUI’s passenger numbers have remained broadly flat for the past five years, its committed risk has gone down, said Neil. As of last week, TUI’s credit rating is back to pre-COVID levels.
The operator has just gone on sale with two additional citybreak destinations – Salzburg and Alicante – with Ryanair flights, after seeing what Neil described as ‘massive growth’ in its cities programme, In particular, it is seeing 200% growth in Poland, with the destination overtaking Amsterdam as its third most popular, behind Dubai and New York.
Other destinations that are doing particularly well for TUI include Kenya – which is seeing a 150% increase in demand – and Thailand, where the operator has doubled capacity to Phuket. Zanzibar is another ‘hot’ destination and a potential for future TUI charters.
Bookings through its network of 1,700 independent agents are growing faster than any other channel, said Neil, but he said TUI is also seeing ‘really strong growth’ through its app.
It will open another two TUI stores this year, boosting its network of more than 300 across the UK.
