Tui smashed first quarter expectations as it swung to a profit on the back of robust travel demand.
Europe’s largest travel operator reported an operating profit of €6million (£5.1million), despite expectations of a €102million loss for the period, according to London Stock Exchange Group data.
The Hanover-headquartered firm, which posted a loss of €153million for the first quarter of last year, also maintained its outlook for a 25 per cent growth in operating profit in 2024.
Europe’s largest travel operator reported an operating profit of €6million (£5.1million) versus a loss of €153million (£130million) in the year-ago period
Tui also set a medium-term target for a compound annual growth rate of 7 per cent to 10 per cent.
Airlines across Europe are enjoying more positive trading conditions after Covid-19 grounded performance over a turbulent few years.
But travel demand is expected to surpass pre-pandemic levels despite economic uncertainty, delays in plane deliveries from manufacturers, and rising jet fuel prices.
Tui was boosted by higher prices and bookings which helped lift its earnings in the reported period, with the company seeing 3.5 million travellers, compared with 3.3 million travellers for the same quarter last year.
Tui boss Sebastian Ebel said: ‘People’s willingness to travel is still high, despite a market environment that remains challenging. We are thus creating the basis for Tui’s future profitable growth.’
The first quarter is usually the weakest for airlines as bookings are lowest in the first three months of the year.
Commenting on the results, Sophie Lund-Yates, lead equity analyst at Hargreaves Lansdown, said: ‘TUI has reported record sales as resilient consumers take to the air.
‘A lot of the operational work TUI has done means it’s in a better position to capture this demand.
‘Efforts to expand higher-end offerings in its hotel portfolio is a shrewd move and could help it remain competitive if lower earners start to pull back on booking holidays.
‘There are questions swirling about TUI’s potential decision to drop its London listing. The added complexity and cost of maintaining dual listings since Brexit has seen others decide to go down a similar route. While it does little to change the business case, the optics for London are less than ideal.’
On Sunday, it was reported that efforts to stop TUI defecting from the London stock market had been dealt a blow after two shareholder advisory groups backed its decision to leave.
The travel company’s executive and supervisory boards recommended that shareholders vote to remove the company from the London Stock Exchange at Tuesday’s annual general meeting.
The firm said having a single German listing could better reflect its ownership and trading patterns, in what would be a blow for the UK market.
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