Europe’s largest tour operator TUI posts strong Q3 due to summer bookings

08/14/2024

1 minute read

2024.08.14 02:46

By Joanna Plucinska, Ilona Wissenbach and Andrey Sychev

(Reuters) -Europe’s largest tour operator TUI on Wednesday beat third-quarter operating profit expectations thanks to strong summer travel demand and a boost from German rival FTI’s bankruptcy.

Travel firms and airlines had hoped this summer season would surpass pre-pandemic levels, despite economic uncertainty, delays in plane deliveries and rising jet fuel prices.

TUI posted 232 million euros ($254.92 million) in underlying earnings before interest and tax (EBIT) for the April-June quarter, up 37% from 169 million a year earlier.

That topped the 217 million euros expected by analysts polled by LSEG.

TUI shares were up 4.3% in early Frankfurt trading soon after the results were published.

TUI reconfirmed guidance for a 25% increase in operating profit this year and revenue up 10%.

The German group recently switched its listing from London to Frankfurt but maintains a large customer base in Britain and saw a boost from the insolvency of competitor FTI.

While demand has remained strong, some airlines saw their quarterly results knocked by rising costs associated with labour disruptions, maintenance and in some cases struggling business bookings.

While budget carrier Ryanair had warned that ticket prices were set to drop as customers become more price sensitive, TUI said it hadn’t seen any slowdown in bookings despite rising prices for its flights and packages, up 3% year-on-year.

TUI’s resilience lies in its travel business. Travel agents have said that packaged holidays have made a comeback as inflation drives up hotel, sightseeing and restaurant prices.