TUI AG (LON:TUI) has lowered its range for profits in 2020 due to the possibility that Boeing's 737 Max aircraft might not return to service by April as initially expected.
The FTSE 100-listed travel operator now forecasts full-year underlying earnings (EBIT) will be between €850mln-1.05bn as opposed to previous guidance of €950mln-1.05bn.
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The German group has secured aircraft replacements for the financial year to September and narrowed the related additional costs to €220mln-€270mln from €220mln-€245mln.
The extra expenses are expected to be offset by compensation by Boeing and “strong trading” in the markets & airlines division, now forecast to grow turnover by a high-single-digit percentage, rather than mid- to high-single-digit.
The new year started “exceptionally well” in terms of bookings, with the UK posting its record month.
In the three months to 31 December, TUI’s first quarter, turnover rose 8% to €3.8bn though underlying profits (EBIT) tanked 77% to a €147mln loss.
Net debt shot up 177% to €5bn.
Analysts at Shore Capital said it was an "encouraging statement", with favourable booking trends alongside progress in the cruise and hotel divisions.
Shares jumped 10% to 945.6p on Tuesday at the opening bell.
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