Key facts
- Tui's airlines business reported a €17m loss in the six months to June.
- The company attributed the loss to geopolitical developments, including the Iran war, and higher fuel costs.
- Two cruise ships were out of service for 12 weeks due to the conflict, costing the company €40m.
- Pretax profits fell 43% to €153m between April and June.
- Customer numbers decreased by 3% to just under 10 million in the period.
Tui's airlines arm has swung to a €17 million loss in the six months to June, a significant downturn from a €50 million profit in the same period last year. The company attributes this decline to a combination of factors, including the ongoing conflict in Iran, which has disrupted travel routes and contributed to higher fuel costs, as well as broader economic pressures like the cost of living crisis and inflation in Europe.
Geopolitical tensions have influenced consumer sentiment, leading to a shift in travel decision-making, with customers increasingly booking holidays at the last minute. Tui's chief executive, Sebastian Ebel, noted that while travel remains important, the timing of booking decisions has changed. The war in Iran specifically impacted Tui's operations, causing a temporary drop in demand for travel to certain destinations and leading to two cruise ships being out of service for 12 weeks, resulting in €40 million in costs related to repatriation and lost income.
Overall, Tui reported a 43% slide in pretax profits to €153 million between April and June, down from €267 million a year earlier. Customer numbers also fell by 3% to just under 10 million during the period. Despite these challenges, Tui has observed a pickup in demand for summer holidays in recent weeks as the peak season begins. The company is also adapting to changing climate patterns, with Ebel suggesting opportunities for travel during cooler 'shoulder seasons' and noting investments in hotel amenities like air conditioning and heating to accommodate this trend.