Tui, the travel group, has reported a €3.2bn loss after the pandemic forced it to slash its holiday programmes and cruise itineraries across Europe and seek emergency aid from the German government.
The tour operator said on Thursday it would increase cost saving measures by a further €100m to €400m to cope with the fallout from the crisis, which has pushed it to near collapse.
Revenues in the year to the end of September fell 58 per cent to €7.9bn, resulting in a €3.2bn pre-tax loss, down from a profit of €692m in 2019.
Last week, it secured a €1.8bn financing deal from a consortium of investors, banks, and Germany’s state-backed economic support fund.
As part of the funding Tui’s largest shareholder, the Russian businessman Alexei Mordashov will increase his current 25 per cent stake in the business. It is Tui’s third government-backed financing since the crisis began.
The group had €2.5bn of cash on its balance sheet at the end of November.
Tui, which has a fleet of around 150 aircraft and 10 cruise ships, has struggled more than nimble online rivals such as Love Holidays and On The Beach to cope with the fallout from frequently changing travel advice and the knock-on hit to consumer confidence that has resulted in holiday cancellations.
But the group said on Thursday that demand for travel next summer was rising and that 50 per cent of its programme for May 2021 was booked. Average prices for summer holidays next year are 14 per cent above 2019 levels.
It added, however, that 2021 would be a “transition year” and that travel would not return to pre-covid levels until 2022.
Fritz Joussen, Tui’s chief executive, said that the group was “ready for a speedy and successful resumption of travel activities as soon as the lockdowns are lifted and destinations reopen. The prospect of vaccinations from the beginning of the year will significantly increase demand for summer holidays in 2021.”