Tui shares rise as it enjoys best ever January bookings
HOLIDAY GIANT Tui has seen its shares soar after revealing its best ever monthly bookings in January thanks to the collapse of rival Thomas Cook.
Shares in Tui surged more than 12 per cent as it said summer bookings in its markets and airlines arm are 14 per cent up year on year in its first quarter to December 31, thanks to the record January performance.
It said the market share boost from the collapse of Thomas Cook was helping to offset the impact of Boeing’s move to ground the 737 Max fleet after two fatal crashes – which is now expected to remain in place to at least mid2020.
Tui upped its revenue outlook for the full year, saying that it is now expecting “high single-digit percentage” growth, having previously guided for mid-single digits.
The group said it is set to get some compensation from Boeing for the plane grounding, though it is having to secure an extra 34 aircraft to cover the lost capacity this year.
It posted a 77 per cent drop in group underlying earnings for the quarter, to 147 million euros (£124.1m), as it pumped investment into its growing holiday experiences business, while it also took a 45 million euro (£38m) hit from the 737 Max plane issue. The group said the worst-case cost of the 737 Max grounding over the full year was now lower than first feared, at a range of 220 million euros (£186m) to 245 million euros (£207m).
But given that the bookings boost from Thomas Cook is among factors helping compensate for this, the group said annual underlying earnings are now expected in the range of 850 million euros (£717m) to 1.05 billion euros (£886m).
The company had warned in December that annual earnings could be dragged down as low as 680 million euro (£574m).
Tui said: “Full-year 2020, in terms of booking trends, has started exceptionally well, with the UK delivering its best bookings volume month in the company’s history.
“We are pleased with customer booking development to date for both programmes; however, the Boeing 737 Max grounding continues to weigh on our operational performance, with an extended grounding now expected for the rest of the financial year.”
Greg Johnson, of Shore Capital, praised an “encouraging statement” from Tui.
“Booking trends across the group are favourable,’’ he added.