Ratings published by independent rating agencies are a key prerequisite for efficient and flexible access to the capital market. They assist debt capital market investors in evaluating the risk situation of companies and their financial instruments.
|Corporate Rating||Standard & Poor's||Moody's|
Latest Update Standard & Poor's
April 2019 – Standard & Poor's confirms its long-term corporate credit rating "BB" on TUI and revised their Outlook to “negative”.
The outlook revision reflects the lowering of our earnings expectations following Tui's profit warning on March 29, 2019, and associated uncertainty. This stems from the unclear duration of the grounding of the Boeing 737 Max 8 jets and the challenging market conditions in the tour operator industry.
Latest Update Moody's
December 2019 – Moody’s downgrades rating from Ba2 to Ba3. The outlook of TUI AG’s corporate family rating remains negative.
TUI's rating reflects the company’s leading market position as the largest integrated tourism company in the world. In recent years TUI has adapted its business model away from a classic tour operator to an integrated provider of holiday experiences, increasing the share of earnings coming from more stable and asset-heavy hotels and cruises segments. Although the longterm prospects for the travel industry remain favourable, the near-term market outlook is becoming increasingly challenging and is prone to disruptions, underpinned by the Boeing 737 Max grounding, which length is uncertain.
The negative outlook reflects ongoing challenges in fiscal 2020, including the persistent overcapacity in the German flight market, slowing economic growth which could impact consumer sentiment, the upcoming Brexit and potential elevated costs in case the Boeing 737 Max remains grounded. Therefore, Moody’s does not expect a recovery in the group’s earnings and credit metrics in the next 12-18 months and anticipates a further negative free cash flow after dividend in fiscal 2020.