(Reuters) – TUI, Europe’s largest tour operator, beat forecasts for third-quarter operating profit on Wednesday, driven by strong summer demand.
“Holidays remain a priority for customers, with summer bookings up 6% on last year,” Mathias Kiep, the group’s chief financial officer, told a news conference.
TUI reported second-quarter earnings before interest and tax (EBIT) of 232 million euros compared with 169 million euros a year ago, an increase of 37%.
This figure exceeds the expectations of analysts surveyed by LSEG, who were counting on 217 million euros.
TUI has reaffirmed its full-year forecast for a 25% rise in operating profit and a 10% rise in revenue, despite delivery delays from Boeing and costs related to an outage at cybersecurity technology firm CrowdStrike last month.
The German group recently moved its listing from London to Frankfurt, but it retains a large customer base in Britain and has benefited from the insolvency of its rival FTI.
On the Frankfurt stock exchange, TUI shares rose by 1.55% to 5.63 euros at around 8:45 GMT.
RESILIENCE IN THE SECTOR
While demand remained strong, some airlines’ quarterly results were hit by rising costs related to labor issues, maintenance or falling bookings.
Unlike Ryanair, which warned that ticket prices would fall as customers became increasingly price-sensitive, TUI did not see a slowdown in bookings despite its flight and package prices rising 3% year-on-year.
“TUI’s third quarter results show that the travel sector has held up better than some segments of the market had expected this summer,” said Julie Palmer of consultancy Begbies Traynor.
TUI’s resilience lies in its travel business, with inflation pushing up prices for hotels, sightseeing tours and restaurants.
Rival easyJet’s all-inclusive holiday business also performed well, helping to support the airline business as a whole.
Sebastian Ebel, TUI’s chief executive, said the tour operator was positioning itself further outside Europe to strengthen its business, particularly in Latin America, the Caribbean and Asia, with the recent opening of a hotel in Vietnam.
(Writing by Andrey Sychev, Joanna Plucinska and Ilona Wissenbach; Elena Smirnova, editing by Kate Entringer)
Copyright © 2024 Thomson Reuters
I have over 8 years of experience working in the news industry. I have worked as a reporter, editor, and now managing editor at 247 News Agency. I am responsible for the day-to-day operations of the news website and overseeing all of the content that is published. I also write a column for the website, covering mostly market news.
