Travel giant Tui has revealed the pandemic pushed it to a 1.1 billion euro (£995 million) loss in its third quarter after it halted holidays, but insisted demand was bouncing back.
The group’s losses for the three months to June compare with year earlier earnings of 102.3 million euros (£92.6 million) and came after it had to suspend its operations for most of the quarter amid global lockdowns, while it was also hit by extra costs from the crisis.
It said widespread cost-cutting action helped limit losses as it pushed ahead with a plan announced in May to slash group costs by 30%, costing up to 8,000 jobs worldwide.
The group also said in July it was shutting 166 or nearly a third of its high street stores in the UK and the Republic of Ireland.
Tui’s trading update laid bare the impact of the pandemic and closure of its operations as it said revenues crashed 98% to 75 million euros (£68 million) in the quarter.
Bookings have also plunged 81% for this summer and are 40% lower for a scaled-back winter programme.
Tui said demand was beginning to return since its operations tentatively got back up and running in mid-May, with holidays resuming from mid-June as global restrictions began to ease.
It has seen 1.7 million new bookings made since holidays restarted, it added, with bookings for summer next year up by a “very promising” 145%, though it has cut its programme by a fifth.
But the holiday sector’s hopes for a rebound this summer were dealt a blow by recent new UK restrictions on travel to Spain.
“Full-year 2020-21 will be a year of transition and we expect a normalised level of business from full-year 2021-22,” the group said.
Tui secured a second credit line from the German government on Wednesday, helping boost its battered balance sheet.
Fritz Joussen, chief executive of Tui, said: “Our integrated business model is proving its worth even in the crisis.
“The implementation of our hygiene and safety concepts and the relaunch of the business could be implemented in the flight, hotel, ship and destination segments from a single source – this has given our guests a high level of security.”
He added: “With the second government credit line, we are prepared if the pandemic again has a significant impact on tourism.”