Travel firm Tui says Boeing 737 Max grounding could cost it up to €300m
Anglo-German travel firm Tui said today that the grounding of the Boeing 737 Max could cost it up to €300m (£278m) for the current financial year.
In its results for the third quarter, the firm’s markets and airlines business posted a €103.9m loss, compared to a profit of €37.2m in the same quarter the year before.
Tui said its markets and airlines business had “continued to see a weak demand environment leading to a later booking behaviour by our customers, reflecting the ongoing knock-on impact of the summer 2018 heatwave and Brexit uncertainty.”
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It said the number of customers was “marginally ahead of prior year” and said the segment “delivered a stable underlying result outside of the 737 Max grounding impact”.
The company said the third quarter was “negatively impacted by the 737 Max aircraft grounding”.
It said it had secured replacement aircraft leases out the end of its summer 2019 programme.
Turnover for the quarter climbed to €4.7bn, up from €4.5bn in the same quarter the previous year.
However, pre-tax profits fell to €47.3m from €104.8m in the same quarter in 2018.
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The company said its balanced business model allowed it to compensate for the weakness in its markets and airlines business.
“Our holiday experiences continue to deliver a strong performance, despite the challenges we currently face in our markets & airlines business, demonstrating the strength of our integrated business model,” it said.
Tui reiterated its underlying earnings before interest, tax and amortisation guidance for 2019, guiding for a fall of 26 per cent compared to the €1.1bn it posted in 2018.
The firm’s shares rose 2.2 per cent to 828p this morning.