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TUI to use larger planes after rush for holidays in Portugal

Summer 2021 prices are up by 22% on average said the FTSE 250 group

TUI AG - TUI prices rise by a fifth as holiday market starts to reopen
The Greek islands, the Balearics, the Canaries and Portugal will be the focus

TUI AG (LON:TUI) said demand for holidays in Portugal had rocketed since the country was put on the UK’s 'green list', with the travel operator switching to bigger planes to meet the demand.

Instead of Boeing 737s, TUI said it would be using Dreamliners to ferry passengers because they are larger.

“We are putting on Dreamliners instead of 737s, because we couldn't even find the slots," chief executive Fritz Joussen told reporters on Wednesday.

Bookings to Portugal were up by 182% over the past weekend after it was confirmed on Friday that the UK had green-listed the country.

Earlier, TUI said customers had been deferring some decisions about a holiday due to the travel uncertainty, but that has seemingly now all come in a rush.

The FTSE 250 group had said prices had already started to rise as demand picked up though this had come too late to save its first-half numbers.

TUI posted a near €1.5bn loss in its latest half-year as revenues dropped 89% but expected a second-half improvement as travel resumes again in earnest.

Summer 2021 prices are up by 22% on average, said the FTSE 250 group, and continue to be driven by both pricing and mix, with a higher level of packaged holidays booked versus the prior year.

The Germany-based firm said it will focus its reopening on areas with low incidences of Coronavirus and good vaccination rates including the Greek islands, the Balearics, the Canaries and Portugal.

In a statement alongside results for the six months to end-March 2021, TUI added that the uncertainty over travel restrictions had affected the summer season with bookings down since December as people deferred a decision until there was more clarity.

Overall, bookings were down by 69% versus two years ago, though TUI said it has kept its capacity for the coming summer at 75% of the 2019 level as it expects activity to pick up from now on.

TUI added that cruises will restart in phases from May while bookings for winter were up by 17% and for next summer by a huge 293%.

Revenues in the six months to March tumbled by 89% to €716mln.

TUI added it had available liquidity of €1.7bn on 7 May with net debt of €6.8bn.

“As international leisure travel resumes and global markets begin to recover, it is our priority to rebuild a robust financial profile and return to a gross leverage ratio target of less than 3x,” said the statement. 

Shares fell 3.5% to 412.5p.

-- adds press conference comment, share price --


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