TUI Misses Forecasts After Booking Travel Disruption Charge in 3Q; Shares Fall

By Anthony O. Goriainoff

Shares of TUI AG fell as much as 4.3% in early trade Wednesday after the travel company missed earnings forecasts after booking a charge related to air traffic disruptions.

The London-listed, German travel operator reported an underlying loss before interest and tax for the quarter ended June 30 of 27 million euros ($27.6 million) compared with a loss of EUR669.8 million the year before and a forecast by UBS analyst Cristian Nedelcu for a EUR75 million profit.
TUI booked a EUR75 million charge in its accounts related to the air traffic disruptions. The European travel sector has been hit over recent months by a shortage of staff after airlines and airports laid off employees during the pandemic crisis, and strikes among ground crew at some major airports.
Shares at 0742 GMT were down 5.10 pence, or 3.6%, at 138.30 pence having fallen to a low of 137.25 pence earlier in the session.
Despite the extra charge TUI said that it expects to return to positive underlying EBIT for the year as a whole as it benefits from a return to travel after the lifting of coronavirus-related restrictions. It carried 5.1 million passengers over the quarter, generating revenue of EUR4.43 billion compared with EUR649.7 million in the year-prior period. One analyst polled by FactSet had a revenue estimate of EUR4.30 billion.
Excluding exceptional and other one-off charges the company made a loss before interest and taxes of EUR42.5 million for the quarter ended June 30 compared with a loss of EUR748.0 million for the third quarter of fiscal 2021.
TUI said that the booking momentum continued to be encouraging with average prices being significantly higher than in 2019.
The company said that bookings were at 90% of the levels seen in 2019, with 11.5 million customers booked for summer 2022. It added that bookings for July and August were at 94% of the level seen in summer 2019, and that it expects to reach almost the same level of bookings in summer 2022 as in 2019.
“Our business performed well in the third quarter – despite the operational challenges in the European tourism sector,” Chief Executive Sebastian Ebel said.
“We continue to expect a strong travel summer 2022 with capacity close to pre-crisis levels and significantly positive underlying EBIT for the full year.”
Write to Anthony O. Goriainoff at anthony.orunagoriainoff@dowjones.com