Prior to entering its close period ahead of reporting its full year results for the twelve months ending 30 September 2019 on 12 December 2019, TUI Group announces the following update on current trading.
Chief Executive of TUI Group, Fritz Joussen, commented:
“On Monday 23 September 2019, our competitor Thomas Cook UK Plc and associated UK entities entered into compulsory liquidation. TUI is preparing measures to support. Where TUI customers are booked on Thomas Cook Airlines flights and these are no longer operated, replacement flights will be offered. We are currently assessing the short term impact of Thomas Cook’s insolvency under the current circumstances, on the final week of our FY19 financial result.
“Our vertically integrated business model proves to be resilient, even in this challenging market environment. Our Holiday Experiences business continues to deliver strong results. Meanwhile, our Markets & Airlines business faces a number of ongoing external challenges such as the grounding of the 737 MAX aircraft, airline overcapacities and continued Brexit uncertainty. The Summer 2019 season is however closing out in line with expectations and we therefore reiterate FY19 underlying EBITA guidance stated in our ad hoc announcement of March 2019 of approximately up to minus 26% compared with underlying EBITA rebased in FY18 of €1,177m.1
“These external challenges will continue in FY20 – therefore, we will focus on becoming more cost competitive in our Markets & Airlines business to protect and extend our market share where possible. Going forward, our two key digital strategic initiatives will deliver greater customer reach in new markets complementary to our existing markets, through our new GDN-OTA2 platform as well in our Destination Experiences markets through our Musement platform, driving further demand to our own Holiday Experiences businesses. TUI is well-positioned to become an integrated digital tourism platform business.”
1 Based on constant currency: FY19 comparative rebased in December 2018 to €1,187m to take into account €40m impact for revaluation of Euro loan balance within Turkish Lira entities in FY18, and adjusted further to €1,177m for retrospective application of IFRS 15
2 Global distribution network (GDN) as TUI’s new Online Travel Agent (OTA) platform, serving run rate of 250k customers to date