Holiday company TUI reduces winter capacity

Holiday company TUI said it had reduced capacity for the coming winter season due to changing travel restrictions, and it continued to evaluate options to boost its balance sheet which has been strained by the Covid-19 pandemic.

The Germany-based group, which is the world’s largest travel company, said on Tuesday its liquidity stood at €2 billion on September 20th, down from €2.4 billion in mid August, with the reduction due to higher customer refund obligations.

Travel restrictions have hit the company hard, forcing it to cancel trips and change its schedule, and rising coronavirus infections across Europe mean it has now reduced its already shrunken winter season by another 20 per cent, it said.

That means less future business, heaping more pressure on the group’s finances.

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“We continue to evaluate options to achieve the optimal balance sheet structure to support the business over the longer term,” said TUI.

Sources say that TUI is considering a share sale of up to €1 billion to prop up its balance sheet. A German government bailout of €3 billion has helped it survive the crisis so far.

TUI stuck to guidance that for its summer season next year it will operate 80 per cent of its adjusted capacity and said it was encouraged by early bookings. – Reuters