TUI1.DE - TUI AG
| Previous Close | 4.4510 |
| Open | 4.4460 |
| Bid | 4.0910 x 41600 |
| Ask | 4.0950 x 224000 |
| Day's Range | 4.0640 - 4.4700 |
| 52 Week Range | 2.4230 - 12.7150 |
| Volume | 2,783,671 |
| Avg. Volume | 3,239,287 |
| Market Cap | 2.401B |
| Beta (5Y Monthly) | 1.25 |
| PE Ratio (TTM) | 5.69 |
| EPS (TTM) | 0.7240 |
| Earnings Date | May 13, 2020 |
| Forward Dividend & Yield | 0.54 (12.13%) |
| Ex-Dividend Date | Feb 12, 2020 |
| 1y Target Est | 19.04 |
- Bloomberg
German Holiday Firm TUI Said to Near $2 Billion in State Aid
(Bloomberg) -- TUI AG, the world’s biggest tour operator, is close to securing nearly 2 billion euros ($2.2 billion) in government aid in what’s seen as a litmus test for Germany’s pledge to rescue businesses ravaged by the coronavirus pandemic.The company and its adviser reached an agreement with Germany’s state-owned KfW development bank on the terms of loans earlier this week, said the people, who asked not to be identified because discussions are private. That financing package is now with TUI’s lending banks, which are expected to sign off in the coming days, they said.Under the preliminary agreement, KfW would provide about 80% of the loans, with the commercial banks shouldering the remaining 20% as part of the state bank’s special program, said the people. Negotiations are ongoing and the exact structure and timing could still change, the people said.A TUI spokesman said the Hanover-based travel giant is in “constructive talks” regarding aid, while declining to provide details. TUI, which has so far scrapped all vacations through the end of April, said on March 15 it would apply for state guarantees following a collapse in sales.TUI shares traded 2.8% higher at 363.9 pence as of 12:31 p.m. in London, where they have their main listing.Governments in Europe and North America are crystallizing plans for bailouts as they become new epicenters for the virus. The U.S. Senate has passed a $2 trillion rescue plan that includes a $61 billion lifeline for struggling airlines and contractors. In the U.K., carriers will have to request bespoke aid beyond 330 billion pounds ($390 billion) of general loan guarantees to business.Read More: Desperate Airlines Turn to European Governments for SupportGermany this week signed off on taking on 156 billion euros of new debt as part of an unprecedented package to cushion economic fallout from the virus. It has also agreed to set up a 600 billion-euro fund to provide companies with loans and guarantees as well as buy stakes in stricken businesses.The package-holiday business in which TUI competes is highly seasonal, with northern hemisphere operators typically recording losses between October and March as they buy hotel capacity, and then generating a profit in the summer. The Covid-19 outbreak could mean the earnings peak is wiped out this year.TUI’s shares have lost almost two-thirds of their value since the start of the year, cutting its market value to 2.3 billion euros. Its credit rating is respectively five and six levels below investment grade at Moody’s Investors Service and S&P Global Ratings, while 300 million euros of bonds due in October 2021 are indicated at 66 cents on the euro, according to data compiled by Bloomberg.(Updates with share price in fifth paragraph)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
- MarketWatch
Global airlines face bankruptcy by May if governments don’t intervene, warns aviation consultant
Airlines fly into one of the bloodiest weeks for the industry, as they battle to survive travel restrictions and country lockdowns in the face of the coronavirus crisis.
- Bloomberg
Nimble Corporate Cash Managers Face a Reckoning
(Bloomberg Opinion) -- ↵The coronavirus will leave no industry untouched but the impact is particularly acute for companies that depend on prompt payment from customers to fund their businesses.In sectors such as car making and the travel industry, it’s common for companies to hold little inventory and settle with suppliers long after they’ve received payment from their customers.As a result they often have what’s called negative working capital: Their trade payables exceed the sum of inventories and customer receivables. In other words, they owe more to their suppliers than their customers owe them.When revenues are growing, this is a big advantage. Cash pours into the business which can be used to fund investments.Customer payments and deposits effectively serve as a free form of finance and that float gets bigger as sales expand.It’s certainly a very efficient way to run a business — Amazon.com Inc. excels at it — but negative working capital can make a balance sheet look stronger than it really is. That’s because the effect is reversed when sales suddenly slow down or shrink. Suppliers still need paying but there’s little new customer cash coming in. As a result, cash rushes out the door. This is what threatens to happen now that much of the world is cooped up at home due to coronavirus.“In periods in which our vehicle shipments decline materially we will suffer a significant negative impact on cash flow and liquidity as we continue to pay suppliers for components purchased in a high volume environment during a period in which we receive lower proceeds from vehicle shipment,” Fiat Chrysler Automobiles NV warned in its annual report. A rule of thumb is that French, Italian and U.S. automakers have negative working capital, while their German peers do not. A six-week production hiatus caused by strike action lowered General Motors Co.’s free cash flow by $5.4 billion.Optimizing working capital has been a key focus for carmaker Peugeot SA and boss Carlos Tavares repeated the trick when he acquired Opel/Vauxhall from GM.Like merger partner Fiat, Peugeot has now been forced to shutter its European car plants. If sales slump for a prolonged period, its 17 billion-euro ($19 billion) cash buffer could dwindle.Tour operators are accustomed to large swings in working capital: They typically get paid by customers ahead of the busy summer season and pay their suppliers afterwards.(1) Bank overdrafts can tide them over during the winter period when cash tends to be lower.Still, a sudden slowdown in demand can upset those calculations, as Thomas Cook Group Plc discovered last year. Customers delayed bookings, suppliers tightened credit terms and the U.K. tour operator went bust.Shares in rival TUI AG slumped this week after it suspended the vast majority of its travel, cruise and hotel operations and said it would apply for state-aid guarantees. The company has 1.4 billion euros in cash and available banking facilities but this is far exceeded by a deeply negative working capital position — at the end of December it held about 2.9 billion euros of advance payments from customers.The cash spring, once a big advantage for many firms, could be about to recoil. (1) They are however required to make pre-payments to hotelsTo contact the author of this story: Chris Bryant at cbryant32@bloomberg.netTo contact the editor responsible for this story: Chris Hughes at chughes89@bloomberg.netThis column does not necessarily reflect the opinion of Bloomberg LP and its owners.Chris Bryant is a Bloomberg Opinion columnist covering industrial companies. He previously worked for the Financial Times.For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
- MarketWatch
European stocks crushed as economies shut down
European stocks traded sharply lower on Monday as the impact of the spreading coronavirus on the world economy offset dramatic efforts by the U.S. Federal Reserve to limit the fallout.
- Bloomberg
Airlines Slash Flights Across Globe as Demand Evaporates
(Bloomberg) -- Airlines worldwide will shrink operations to only a trickle of flights, severing global links and putting hundreds of thousands of jobs at risk as they fight to preserve cash and survive the coronavirus pandemic.British Airways owner IAG SA will slash capacity for April and May by at least 75% amid the collapse in demand and government restrictions aimed at slowing the disease. Partner American Airlines Group Inc. will cut international long-haul flights by the same degree in the biggest reductions by a U.S. carrier.Ryanair Holdings Plc and Air France-KLM announced even deeper cuts at 80% and 90% respectively, and the Irish firm said its entire fleet may be grounded. Paris’s two biggest airports plan to shutter terminals as travel hubs stand almost empty, while TUI AG, the largest vacation firm, will suspend the bulk of its hotel and cruise-ship operations.Job cuts mounted as Norwegian Air Shuttle, already mired in debt and losses, cut 7,300 posts, and Virgin Atlantic Airways offered staff 12 months of leave.The actions reflect mounting fears that Covid-19 threatens the survival of even healthy travel companies as people stay home and the disease wipes out economic growth. White House officials are looking at letting cash-strapped carriers keep some taxes and passenger fees, while European governments are exploring measures that could go as far as partial nationalization.“Coordinated government and industry action is needed now if catastrophe is to be avoided,” the Sydney-based CAPA Centre for Aviation said Monday. Otherwise, “emerging from the crisis will be like entering a brutal battlefield, littered with casualties.”Many airlines have probably substantially breached debt covenants already, and the pandemic will bankrupt most carriers worldwide by the end of May without coordinated action, the report said.Fallout from the outbreak is sparing few airlines anywhere.Delta Air Lines Inc. and United Airlines Holdings Inc., the biggest U.S. network operators alongside American, further reduced schedules. And in Australia, Qantas Airways Ltd. said it plans a fourth round of capacity cuts after the government forced anyone arriving from overseas to isolate themselves.IAG, which owns airlines in Spain and Ireland as well as BA, will freeze hiring and veteran Chief Executive Officer Willie Walsh, who was due to stand down this month, will delay his retirement. Like many airlines the company said it’s no longer possible to provide estimates for full-year earnings.Pay CutAt Air France-KLM, CEO Ben Smith addressed staff in a video following an extraordinary board meeting and talks with the French and Dutch governments, which hold stakes in the carrier, on support that could include postponing taxes, fees and charges.“We don’t know when this will end,” said Smith, who is taking a 25% pay cut. The company has begun talks with unions on shorter working hours and has pulled wide-body jets including Airbus SE A380s. The superjumbo is also suffering a cull elsewhere, with Dubai-based Emirates grounding 29.Global airport operator Aeroports de Paris said that in addition to closing some Paris terminals and suspending airline fees for parking jets, it has shut shut down hubs in Amman, Jordan, Ohrid and Riga, Latvia.Cuts at Finnair Oyj will be among the steepest, with the carrier eliminating about 90% of normal capacity from April “until the situation improves.” It had already taken a battering from the earlier collapse in Asian travel after following a strategy focused on serving China, Japan and South Korea.Companies have sought to provide reassurance about their liquidity, with EasyJet Plc saying it has a 1.6 billion-pound ($2 billion) cash balance, an undrawn $500 million revolving credit and aircraft worth more than 4 billion pounds. Europe’s second-biggest discounter said it expects to ground most planes while operating what it called “rescue flights” for short periods.Ryanair said it has 4 billion euros ($4.5 billion) in cash and will also defer capital spending and share buybacks to bolster reserves.TUI fell as much as 39% in London, the most ever, after sayingit was winding down travel. The group’s airlines are nowfocused on bringing people home, and the last two or threecruise ships will stay in port once they dock. Destinations where some outbound flights continue include Egypt, Cape Verde and Mexico.Virgin Atlantic Airways Ltd. chief Shai Weiss has written to U.K. Prime Minister Boris Johnson saying British carriers and airports may need credit of 7.5 billion pounds. The airline will have terminated four-fifths of daily services by the end of next week and could ground all-but 15% of its planes in April.Job cuts are racking up, most of them temporary for now. The ax has come down hardest in Scandinavia, with Norwegian Air laying off 90% of staff, the same proportion as at tri-national rival SAS AB, where up to 10,000 people will be sent home as it cancels most flights.Elsewhere, recruitment freezes have become the norm. Virgin’s staff will also be required to take eight weeks of unpaid leave over the next six months, and it’s touting voluntary severance packages and year-long sabbaticals.American announced additional cuts hours after President Donald Trump extended a ban on some flights into the U.S. to include those from the U.K. and Ireland, while U.S. capacity will fall 20% in April and 30% in May from a year earlier. The carrier is also cutting flights to numerous cities in South America, Australia, New Zealand and Asia.United will reduce its capacity about 50% in April and May, deepening previous cuts, the company said late Sunday. Executive salaries will be halved and talks will begin with unions to lower wages, with CEO Oscar Munoz warning that the process will “be painful for all of us.”(Adds Norwegian Air, Virgin Atlantic plans from fourth paragraph. A previous version of this story corrected the spelling of Covid-19.)\--With assistance from Ania Nussbaum, Angus Whitley, Siddharth Philip and Richard Weiss.To contact the reporters on this story: Mary Schlangenstein in Dallas at maryc.s@bloomberg.net;Anurag Kotoky in New Delhi at akotoky@bloomberg.net;Christopher Jasper in London at cjasper@bloomberg.netTo contact the editors responsible for this story: Brendan Case at bcase4@bloomberg.net, ;Anthony Palazzo at apalazzo@bloomberg.net, Tara Patel, Andrew NoëlFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
- MarketWatch
FTSE 100 slumps below 5,000 as U.K. airlines tumble
British stocks slumped on Monday as the widening spread of coronavirus blasted the airline sector in particular.
- Reuters
Airlines seek emergency aid as coronavirus brings industry to near-halt
LONDON/PARIS, March 16 (Reuters) - Airlines made unprecedented cuts to flights, costs and staffing on Monday, and stepped up calls for emergency government aid, as coronavirus lockdowns and new travel restrictions hit more major routes. Already battered shares in British Airways parent IAG , easyJet and Air France-KLM plunged again as they scrapped most of their flights for the coming weeks, joining other major carriers that are all but halting operations in the face of the pandemic. "It is now clear that the coronavirus is by far the biggest crisis in the history of aviation," Finnair Chief Executive Topi Manner said as the carrier announced a 90% capacity reduction and its second profit warning in three weeks.
- Bloomberg
Would You Buy a 10%-Off Cruise Right Now?
(Bloomberg Opinion) -- In the wake of the coronavirus, enticing people to set a course for adventure on a floating mega-palace will be a difficult proposition.The public image of cruises, which for many older people are still associated with the 1970s American TV series “The Love Boat,” has been tarnished by the pandemic. On Thursday, Carnival Corp. said it would suspend all voyages by its Princess Cruises division, which suffered the only known outbreaks of coronavirus at sea, for 60 days. Cruising divides opinion at the best of times. Fans see it as a fun, hassle-free and cost-effective way to explore several often sun-drenched destinations in one go, particularly when food, drinks and entertainment are thrown in. For others, it conjures up a horror of claustrophobia, seasickness and way too much proximity to other holiday makers. Headlines about passengers stuck on ships turned away from ports for fear there may be a deadly virus on board will only serve to reinforce their aversion.The images of Carnival’s majestic Grand Princess, a behemoth that spent days circling the waters around San Francisco because 21 passengers tested positive for the virus, will be particularly damaging. As will an unprecedented warning from the U.S. State Department not to take cruises because they hold an elevated risk of Covid-19 infection and potentially landing in quarantine on a foreign shore. After all, North America is the world’s biggest cruise market by some distance.It’s hard to see how a $60 billion industry that’s already made such an effort to remake its image as more than a retirement pastime can easily overcome this hit. It still depends in large part on passengers over 50 who may be more likely to think twice getting on board. And before embarking, those over 70 may even be required to present a doctor’s note that they have a clean bill of health, not exactly reassuring for a carefree getaway. But first for the immediate pain. The global pandemic could hurt the cruise industry worse than both the 9/11 terrorist attacks in 2001 and the financial crisis of 2008-2009, according to Brian Egger, an analyst at Bloomberg Intelligence. Even before Carnival’s decision to suspend its 18 Princess vessels, he was estimating that revenue yields, a measure that reflects both pricing and occupancy leverls, could fall by as much as 20% this year.Richard Clarke, an analyst at Bernstein, estimates that most bookings for travel packages are down around 40% across the market. The drop off in cruise demand may be even worse.That’s a worry for the big U.S. operators — Carnival, Royal Caribbean Cruises Ltd. and Norwegian Cruise Line Holdings Ltd. — as well as TUI AG, the German tour operator that’s been developing its ocean-vacation arm to give it an edge against rivals. Carnival’s response is a dramatic one. But more lines could take this option, both to stem losses from operating half-empty vessels and to give them a very deep clean as a way to reassure holidaymakers that they are safe once the pandemic has subsided. On Friday, travel-to-insurance group Saga Plc said it was spending its cruise operations, cutting profit by up to 15 million pounds ($18.9 million).Alternatively, cruise operators could look to continue filling vessels with deep discounts. Analysts at Nomura have estimated that pricing could drop by at least 10% this year. That may encourage enthusiasts to take to the high seas, but at a lower profit. Yet as the pandemic spreads, and people around the world question how far from home they’re willing to travel, it’s unclear just how many takers there will be. And that’s before any official travel restrictions, such as President Donald Trump’s decision to temporarily curtail European travel to the U.S. It’s understandable that shares have tumbled since the coronavirus took hold.To weather the shock, Royal Caribbean and Norwegian have boosted liquidity in recent days. Even so, Royal Caribbean looks to face the most difficult challenges ahead, with net debt reaching 3.7 times Ebitda at the end of this year, according to the Bloomberg consensus of analysts’ estimates. That’s compared to Norwegian at 3.3 times and Carnival at 2.5 times. The industry may recover from the latest shock. After all, demand returned after the Costa Concordia disaster in 2012, when 32 people died after the cruise ship ran aground off the Italian coast. But it may never be the same again.Previous contagious outbreaks had prompted the industry to tighten hygiene standards. It will have to elevate them further given the spotlight on the dangers of thousands of people living in close quarters. Additional steps, such as more stringent screening of guests and staff, could raise expenses. Cruise lines will likely look methodically to ensure they have agreements with all ports on every itinerary so ships with sick passengers can dock. Putting such arrangements in place would take time and involve more cost.With the focus on the heightened risks faced by older travelers, especially those with underlying health conditions, cruise operators will need to intensify efforts to capture younger consumers, with all the associated marketing expense and investment in amenities to attract them. TUI Cruises is already focused on family vacations, while Walt Disney Co. has plans to almost double its fleet to seven ships by 2023. Virgin Voyages, Richard Branson’s over-18s luxury cruise offering, recently took delivery of its first liner, boasting Instagrammable spots, yoga classes and a festival-like lineup of shows, although it has postponed the Scarlet Lady’s maiden voyage.Winning over young adults won’t necessarily be easy. Cruise liners are associated with a list of environmental problems. So while “cruise shaming” hasn’t yet caught on, expect more focus on the industry’s impact on the planet, as well as its role in over-tourism in cities from Barcelona to Venice and Copenhagen.For the time being though, cruise operators’ main focus will be keeping passengers healthy and making sure that any ships that do sail are as full as possible. With ever more alarming headlines, that means more struggles for the Love Boat.To contact the author of this story: Andrea Felsted at afelsted@bloomberg.netTo contact the editor responsible for this story: Melissa Pozsgay at mpozsgay@bloomberg.netThis column does not necessarily reflect the opinion of Bloomberg LP and its owners.Andrea Felsted is a Bloomberg Opinion columnist covering the consumer and retail industries. She previously worked at the Financial Times.For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
- MarketWatch
Markets ‘powered through’ SARS, but the coronavirus outbreak is different, Cowen says — and here’s why
The coronavirus epidemic could have a worse impact on stocks and the travel industry than the SARS outbreak, Cowen analysts are warning.
- Bloomberg
Shopping Malls Face Their Coronavirus Reckoning
(Bloomberg Opinion) -- The biggest coronavirus risk to retailers on both sides of the Atlantic may turn out to be empty stores, rather than empty shelves.As the outbreak has spread from Asia to Europe and the U.S., concern has shifted from the impact on supply chains because of closed Chinese factories to the potential of the deadly disease to put a sudden brake on consumer spending.While fashion chains and do-it-yourself merchandisers rely less on China today than they did a decade ago, it’s inevitable there will be some supply problems. The country is still the world’s biggest clothing exporter, and it makes everything from paddling pools to power tools. Associated British Foods Plc, owner of cheap chic fashion chain Primark, and U.S. athletic apparel maker Under Armour Inc. have recently warned of the risks.A full understanding of the impact will only come later. Many spring fashions and home furnishings were shipped before the outbreak, and there is evidence that factories are returning to work. But the closures in February will mean that some orders for the summer and potentially even the back-to-school shopping seasons may not reach stores in time. For apparel retailers this is a particular risk. If say, pastel hued coats designed to be worn in the spring arrive when the weather is warmer, those coats will need to be discounted to sell.But some canceled orders may be a blessing.The worry now is not that shoppers won’t find what they are looking for, it’s that they won’t hit the mall and spend time browsing for it in the first place. Almost half of U.K. retailers surveyed by consultancy Retail Economics and law firm Squire Patton Boggs had already seen a negative impact on their sales, with three quarters expecting revenue to be hit if the virus continues, according to a report published on Wednesday.This adds to anecdotal evidence, from some retailers finding trading tougher than expected to others seeing footfall weaken. In the U.K., traffic to stores held up until Thursday, but as bad news about the virus intensified, shopper numbers dropped, particularly in malls. Even for a Tuesday evening in March, London’s Oxford Street seemed unusually quiet yesterday. Expect the same pattern in the U.S. as new cases pop up in new cities. It would be understandable if people hesitate to head to the mall and avoid lingering at the supermarket after filling their cart with hand sanitizer, toilet paper and food staples for a month. After all, employers such as Amazon.com Inc. are telling workers to limit non-essential travel and governments in countries like France are banning events for more than 5,000, leaving worried citizens to wonder how many people is too many people in one place. And with Covid-19’s symptoms silent for a long incubation period it can be tempting to avoid public spaces altogether. Reasons for splurging at the shops are also evaporating as major events get canceled or delayed, and by extension people contemplate skipping parties, weddings or graduations. For example, tech giants including Facebook Inc. and Twitter Inc. have pulled out of the South by Southwest tech conference in Austin, Texas. That means purchases that would have been made — from trendy sneakers to wear at SXSW to the suit to impress at any number of industry conferences — may be lost.Travel is another boon to spending that risks being sapped. Tour operator TUI AG said holiday bookings have weakened over the past week. Unless they come back later on, that means fewer bikinis and tubes of suntan lotion filling shopping carts. If the problem is consumers hibernating, then online retailers such as Amazon and Britain’s Asos Plc, could be protected. But if the issue is a lack of stimulants to spending, no one will be spared. There’s also the knock on effect on restaurants and bars if consumers stay home.There may be some offsetting factors. For example, Brits and Americans have been bulk buying essentials in retailers such as Costco Wholesale Corp. Long-life milk, nappies and bottled water are all in demand at supermarkets. At the other end of the spectrum, shares in Peloton Interactive Inc. defied the market rout last week on hopes that more fitness fanatics would work out at home, rather than go to the gym.Any short-term silver linings will be lost if consumers simply hunker down. The risk of a pandemic, as well as market uncertainty or worse, are hardly conducive to splashing out. Britons had started spending again after pulling in their purse strings during the impasse over their departure from the European Union. In contrast, U.S. consumer confidence has remained remarkably robust. But cracks are emerging. U.K. consumer confidence dropped for the first time in five months, according to YouGov and the Centre for Economics and Business Research. Meanwhile, in the U.S., the Bloomberg Weekly Consumer Comfort Index suffered its largest one-week drop since late October in the week ending Feb. 23.As with trading, it’s hard to separate out what’s due to the virus and what’s down to other factors. But either way, it’s a timely reminder that faced with an epidemic, consumer demand also isn’t immune.To contact the author of this story: Andrea Felsted at afelsted@bloomberg.netTo contact the editor responsible for this story: Melissa Pozsgay at mpozsgay@bloomberg.netThis column does not necessarily reflect the opinion of Bloomberg LP and its owners.Andrea Felsted is a Bloomberg Opinion columnist covering the consumer and retail industries. She previously worked at the Financial Times.For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
- Bloomberg
Suddenly, That Beach Holiday Has Lost Its Appeal
(Bloomberg Opinion) -- The deadly coronavirus has spread to European holiday destinations. That’s of huge concern to a travel industry that will soon be gearing up for its peak summer season.When the outbreak emerged in China, worries centered on airlines and hotels in that region, as well as valuable outbound tourism from the country. But now the disease has shown up in Italy, and notably in Spain’s Canary Islands, shorter haul European travel is being drawn into the fray.Shares in TUI AG, Europe’s biggest travel operator, have fallen about 18% this week, while those of the budget airlines EasyJet Plc and Ryanair Holdings Plc are down by about 20%.Already reeling from the “flight shame” phenomenon, which has seen some environmentally conscious consumers shunning air travel, and disruption from grounded Boeing 737 Max jets, a global viral outbreak will have a profound effect on the confidence of travelers and vacationers everywhere.Europe’s peak period for early holiday bookings, stretching from Boxing Day to the third week of January, ended just as the virus was emerging. The first Saturday in January is known as “Sunshine Saturday,” when holidaymakers hit the travel agents or, more probably, buy their flight and accommodation on the internet.But even booked trips are at risk of cancellation as Europeans digest what’s happening in the Spanish holiday island of Tenerife, where 700 people have been contained in a hotel after several guests were found to have the virus. What’s more troubling for the travel industry is that most of their profit doesn’t come from early bookers, but rather from people who are buying holidays from now onward.The outbreak in northern Italy is equally difficult for the airlines (it is a big part of Ryanair’s business) and travel companies, but that country tends to offer more upmarket destinations. The Canary Islands and mainland Spain — where some cases have also been identified — are firmly in the middle and mass markets, so the impact there could be bigger. TUI AG’s RIU hotel chain has a strong presence in Spain and the Canary Islands.Cruises, obviously, have been hit hard by the outbreak, given the pictures of passengers quarantined on ships being beamed around the world. That’s another big worry for TUI, which which has been building its ships business. Analysts at Morgan Stanley estimate that the volume of bookings has fallen by double digits across the whole of the cruise market in the U.S. and Europe in recent weeks.If the outbreak is contained relatively soon, the effect on tour operators might be short-lived. Holidaymakers who have held off from booking should come back to the market. But if infections continue beyond May, as looks increasingly likely, the industry’s problems will intensify.At this point, the travel groups are usually snapping up airline capacity for the peak summer months. As they make all of their profit during this period, a prolonged outbreak now would be doubly damaging. One poor summer season in 2018, because of a European heatwave, helped to sink the British travel giant Thomas Cook. That company was also burdened by more than 1 billion pounds ($1.3 billion) of debt, but it’s fate underlines just how dependent the travel industry is on the traditional beach getaway.To contact the author of this story: Andrea Felsted at afelsted@bloomberg.netTo contact the editor responsible for this story: James Boxell at jboxell@bloomberg.netThis column does not necessarily reflect the opinion of Bloomberg LP and its owners.Andrea Felsted is a Bloomberg Opinion columnist covering the consumer and retail industries. She previously worked at the Financial Times.For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
- Thomson Reuters StreetEvents
Edited Transcript of TUI1.DE earnings conference call or presentation 11-Feb-20 7:15am GMT
Q1 2020 Tui AG Earnings Call
- MarketWatch
European stocks close at record high as travel sector booms
European stocks rebounded on Tuesday in a broad-based advance, with the travel sector rallying as tour operator Tui demonstrated how it has benefited from the collapse of a rival.
- MarketWatch
NMC Health roller-coaster ride continues as KKR puts terse end to takeover speculation
The roller-coaster ride of NMC Health continued on Tuesday after a private equity group tersely dismissed takeover speculation.
- MarketWatch
TUI widens FY 2020 guidance to reflect 737 MAX grounding
TUI AG on Tuesday widened its full-year profit forecast due to the grounding of Boeing Co.’s (BA) 737 MAX aircraft, as it reported a slightly narrowed net loss for the first quarter of the fiscal year.
- Simply Wall St.
2 Days To Buy TUI AG (ETR:TUI1) Before The Ex-Dividend Date
TUI AG (ETR:TUI1) is about to trade ex-dividend in the next 2 days. This means that investors who purchase shares on...
- Reuters
TUI boosts joint venture with Royal Caribbean Cruises
Holiday company TUI on Friday said it would bolster its cruises joint venture with Royal Caribbean Cruises by bringing in its Hapag-Lloyd Cruises unit, which is valued at 1.2 billion euros ($1.32 billion) as part of the deal. TUI said the transaction, under which the TUI Cruises joint venture will become the new owner of the unit, would result in a considerable book gain and is expected to be completed in summer 2020.
- Simply Wall St.
Why TUI AG (ETR:TUI1) Could Be Worth Watching
TUI AG (ETR:TUI1), which is in the hospitality business, and is based in Germany, received a lot of attention from a...
- Reuters
Airbus hits record highs, 737 MAX buyers fall on latest Boeing news
PARIS/LONDON (Reuters) - Airbus' shares hit record highs on Wednesday, after U.S. arch rival Boeing warned of further delay in returning its grounded 737 MAX airliner to service, while Boeing customers and suppliers fell on the news. Boeing said on Tuesday that it did not expect to win approval for the 737 MAX to return to service until mid-year. Airbus was up by 1.85% at 138.9 euros at 1215 GMT, the top performer on France's benchmark CAC-40 index after hitting a record high 139.32.
- Reuters
UPDATE 2-Ryanair CEO says group may not get 737 MAX until October - report
Ryanair may only receive its first delivery of the grounded 737 MAX aircraft from Boeing in October, chief executive Michael O'Leary said in an interview with German magazine Wirtschaftswoche. The 737 MAX, Boeing's fastest-selling aircraft, has not flown since last March following two crashes which claimed 346 lives. O'Leary told Reuters last month that Ryanair may not receive any MAX aircraft in time for its summer season.
- Simply Wall St.
TUI AG Full-Year Results: Here's What Analysts Are Forecasting For Next Year
TUI AG (ETR:TUI1) last week reported its latest annual results, which makes it a good time for investors to dive in...
- Thomson Reuters StreetEvents
Edited Transcript of TUI1.DE earnings conference call or presentation 11-Dec-19 2:30pm GMT
Full Year 2019 Tui AG Earnings Call
- Reuters
UPDATE 3-TUI says 737 MAX grounding could cost it 400 mln euros in 2020
Holiday company TUI Group said the grounding of its Boeing 737 MAX planes would continue to drag on profits, with a hit of up to 400 million euros possible in its 2020 financial year if the jet does not come back into service by May. The company, whose main rival Thomas Cook went out of business in September, said on Wednesday that earnings forecasts for the 12 months to end-September 2020 assumed a 130 million euro hit from the grounding.
- Reuters
TUI annual earnings drop on 737 MAX grounding
TUI Group's annual earnings fell 26%, in line with a previously downgraded outlook, as Europe's biggest holiday company paid the price for its Boeing 737 MAX planes being grounded. The company, whose main rival Thomas Cook went out of business in September, said that it expected earnings to return to growth for the 2020 financial year, although it warned that the 737 MAX grounding would impact it by at least 130 million euros next year. TUI posted annual core earnings (EBIT) of 893 million euros in the 12 months to Sept. 30, and guided that earnings next year would be in the range of 950 million euros to 1.05 billion euros.
- Simply Wall St.
Is TUI AG (ETR:TUI1) Creating Value For Shareholders?
Today we are going to look at TUI AG (ETR:TUI1) to see whether it might be an attractive investment prospect...
