Tour operator Tui this morning posted a €1.1bn (£1bn) loss in the third quarter as business came to a “standstill” due to the coronavirus pandemic.
The near total shutdown of its operations took the world’s largest holiday firm’s loss to €2bn over the past nine months, it added.
Shares in the Anglo-German firm fell nearly 5.5 per cent as markets opened this morning.
Tui fell to a €1.1bn loss in the three months ended in June, compared to a €100m profit in the same period last year.
Group revenue fell 98 per cent to €75m, it said, due to the shutdown, with partial reopening beginning in mid-May.
Over the lucrative summer period, the firm said that bookings were down 81 per cent as the pandemic continues to disrupt international travel.
However, looking ahead to next summer bookings are up 145 per cent.
Tui said it was targeting an annual saving of over €300m as a result of the pandemic.
Why it’s interesting
The global holiday and aviation markets have been among the worst hit by the crisis, which all but stopped international travel.
Over the quarter, the firm managed to open just 55 of its hotels, a mere 15 per cent of its portfolio, with an average occupancy of 23 per cent.
Tui, which is heavily exposed to the downturn, has begun taking steps to shore up its finances ahead of an uncertain future for the industry.
Yesterday it agreed a €1.2bn rescue package with the German state in order to bolster its liquidity.
Of the new funding, €1.05bn will be provided by state lender KfW, while the additional €150m will be offered as a convertible bond.
The new package comes on the back of an initial €1.8bn, which was provided by KfW in April.
Tui has also said it will shut 166 UK high street stores and sell a number of its Boeing 737 planes in order to raise funding.
It will also carry out a widespread restructuring, with 8,000 roles set to be lost due to the pandemic.
What Tui said
In a statement, the firm said: “Financial year 2021 will be a year of transition and we expect a normalised level of business from financial year 2022.
“Our priority will be rebuilding a robust financial profile. The Group will now evaluate options to achieve the optimal balance sheet structure to support the business over the longer term.”