LONDON (Reuters) – Europe’s largest tour operator TUI reported a surprise first-quarter operating profit on Tuesday, driven by robust travel demand.
Underlying earnings before interest and tax stood at 6 million euros in the first quarter, compared to a loss of 153 million euros a year ago. Analysts surveyed by LSEG expected a loss of 102 million euros.
The company recorded a 6% increase in passengers, with 3.5 million travelers in the first quarter.
“People’s willingness to travel is still high, despite a market environment that remains difficult. We are thus creating the basis for TUI’s future profitable growth,” TUI CEO Sebastian Ebel said in a statement.
TUI maintained its operating profit growth outlook of 25% for fiscal 2024, and targets annual growth of 7% to 10% in the medium term.
European airlines are entering 2024 with solid prospects. Travel demand is expected to surpass pre-pandemic levels despite economic uncertainty, aircraft delivery delays from manufacturers and rising jet fuel prices.
The first quarter is typically the weakest for airlines, with bookings being at their lowest during the first three months of the year.
Separately, the travel company’s management and supervisory boards have recommended that shareholders vote in favor of delisting the company from the London Stock Exchange at Tuesday’s annual general meeting.
The dual listing of TUI Travel in London and Frankfurt, Germany, results from the merger of German company TUI and British company First Choice Holidays in 2007.
(Reporting Joanna Plucinska; Gaëlle Sheehan, editing by Zhifan Liu)
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