Travel operator TUI (TUI) fell 3.2% as investors were put off by mounting losses despite signs of a recovery in bookings for summer 2021 and 2022.
The company posted a €1.5 billion first-half loss as the pandemic continued hammer the tourism sector. Revenue slumped 89% to €716.3 million.
‘The continued vaccination progress across our key customer markets and destinations, combined with more testing, and comprehensive hygiene measures throughout our eco-system, should enable the safe return to holidays this summer,’ TUI said.
It added that it had a pipeline of 2.6 million customers booked for the summer 2021 season and planned capacity of 75% of summer 2019 for its upcoming peak summer months.
The plan is to focus on destinations such as Greece, Balearics and Canaries ‘with anticipated good vaccinations rates and low infection rates’, it said.
NON-ESSENTIAL TRAVEL RESTARTS
The recent announcement of a restart of non-essential foreign travel from the UK from 17 May didn’t include the popular holiday destinations of France, Greece and Spain under the ‘green list’ category where travellers can visit and return without the need to quarantine. Portugal is the only mainstream location on the green list.
AJ Bell investment director Russ Mould commented: ‘Airlines and traditional travel operators like TUI have significant fixed costs any cash from holidaymakers, losses and debt can mount quickly.
‘For all the concerns over TUI, there’s an argument in Germany that the company is seen as ‘too big to fail’, having been bailed out by the German government three times so far during the pandemic and received almost €5 billion in state support.
‘And despite the complications and continuing restrictions it does appear people are willing to put up with Covid tests and periods in isolation if it means you can enjoy a cocktail on the beach or a dip in the Med.’