New virus restrictions in Europe lead tour giant to trim capacity

TUI scaled back its holiday program for this summer amid new coronavirus restrictions in Europe, while saying it’s confident that vaccine rollouts will continue to spur bookings later in the year.

The world’s biggest tour operator will now offer 75% of 2019 capacity in the peak travel months starting in July, it said in a statement last week. The company had previously targeted 80% of capacity for the season, including May and June.

Uncertainty over when and how travel bans will be lifted has sparked doubts about a hoped-for revival in vacations. U.K. Prime Minister Boris Johnson is expected to delay the reopening of leisure flights in an update set for April 5, while Germany and France have imposed new restrictions.

“The group remains flexible to increase capacity again in the short term as further progress is made on pandemic response and vaccination campaigns, travel restrictions are lifted and customer demand increases,” TUI said in the release.

TUI shares slid in Frankfurt on Thursday, bringing the decline this month to 15% as the outlook for summer worsens.

While TUI has booked 180,000 new guests since February, the overall figure for the summer is stuck at 2.8 million — 60% below the comparable level for 2019 — after others canceled holidays planned for Easter and early in the season.

The Hanover, Germanybased company said the figures include people who chose new dates after being bumped from a holiday last year because of the pandemic. Some customers have pushed holidays into 2022, the company said.

The company said it has sufficient liquidity “until the summer,” with $1.9 billion in cash and available facilities as of early last week.