The US-Iran war has already cost TUI Group €40 million, but the operator has reported a strong first half of the year and is confident it can weather the challenges of the second.
“This year is not the best but there are a lot of opportunities,” CEO Sebastian Ebel told a media call this morning (13 May) as the operator announced its half-year results.
Group Chief Financial Officer Mathias Kiep confirmed the revised outlook announced last month as TUI reported it narrowed its second-quarter operating loss by 9%, to -€188m for the three months to 31 March. This was better than earlier forecasts.
Underlying EBIT [operating profit] was reduced by €45 million to -€111 million, despite the impact of the war in Iran, and a €5m hit from Hurricane Melissa in Jamaica.
Mathias said: “Our strong results in the first half of the year show that we can successfully offset the financial burdens from the war in Iran and Hurricane Melissa in Jamaica. TUI is resilient. Despite all the challenges in the world, we are looking forward to the second half of the year with confidence.”
Research by TUI Group last month revealed 60% of those who are yet to book have been influenced by the Middle East conflict.
Sebastian said: “People are more hesitant booking longer term,” but added: ‘short-term bookings are extremely strong’.
He maintained TUI has enough fuel for July and August and said there would be ‘no impact on summer at all’. He said Europe is now getting more oil from other countries, such as Nigeria, and in any case, ‘we are hedged’.
But he said that, currently, ‘the [Middle East] market is dead. People are hesitant to go to Dubai, Doha and Abu Dhabi’, adding: “They will by the end of the year.”
He said Greece will have a good year and there is ‘still a lot of capacity in Türkiye, adding the Western Med is well booked, so you may see price increases’.
“Other countries – Türkiye, Cyprus and Egypt – will come to the market with great offers. But for the Western Med, the longer you wait, you will pay higher prices,” he predicted.
TUI also announced it is to launch a loyalty programme in the UK soon.
