Grounded aeroplanes and Brexit blamed for holiday giant’s woes

Holiday giant Tui has reported a 46% plunge in underlying earnings after taking a hit from the grounding of Boeing’s 737 Max 8 aeroplane and as Brexit dampens demand.

The group saw underlying earnings slump to €100.9 million (£93.6m) in its third quarter after booking costs of €144m (£134m) from the 737 Max woes, while trading is also being hit by the weak pound and Brexit uncertainty.

Tui now expects costs for the aircraft issue of around €300m (£278m) for the full year.

It comes after Boeing grounded the plane in the wake of the Ethiopian Airlines crash in March which killed 157 people, months after the same model was involved in the Lion Air crash in Indonesia which killed 189.

Tui said trading continued to be impacted by Brexit uncertainty and a “knock-on impact” from last summer’s heatwave as holidaymakers leave it later to book their trips on hopes for sunny weather on these shores.

It said: “We saw delayed customer bookings driven by the summer 2018 heatwave, the continued Brexit uncertainty and considerable aviation overcapacity to Spanish destinations continued in the third quarter.”

Tui chief executive Fritz Joussen said for British holidaymakers, the recent plunge in the pound on no-deal Brexit worries has effectively pushed up prices by another 4%.

“It’s not a disaster, but it’s not little,” he said.

It comes after prices were already sent soaring due to the weaker pound after the Brexit vote in 2016.

Bookings for the summer are down 1% year-on-year, although it said this marked an improvement since the first half, when they fell 3%.

Tui said it had secured replacement aircraft leases to the end of the summer 2019 programme to cope with the 737 plane issues.