Tui blames ‘disruptions in air traffic’ for early summer loss

Europe’s biggest holiday company has blamed “disruptions in air traffic” for another quarterly loss.

Tui made 200 outbound flight cancellations in May and June, mainly as a result of resourcing issues involving its ground handler, Swissport, at Manchester airport.

Revealing its third-quarter results for the April-June spell, Tui said disruption had led to €75m (£64m) in “additional costs caused by the irregularities, particularly in British air traffic”.

The holiday giant says that in May and June, one in 25 passengers was delayed by three hours or more. It stresses that the flight cancellations in this period “represent less than 1 per cent of the entire summer programme”.

Without the extra costs, Tui calculates that its underlying profit would have been €48m (£41m) – its first quarterly profit since the start of the coronavirus pandemic.

Yet with average selling prices for July to September holidays being one-fifth higher than the pre-Covid level, and the number of bookings almost the same, the Anglo-German travel firm predicts it will make a profit in the full year ending in September 2022.

Tui has sold summer holidays amounting to 90 per cent of 2019 booking levels.

The outgoing chief executive, Fritz Joussen, said: “We are experiencing a strong travel summer. Tui is secured, and economically and operationally back on track, when I hand over the chairmanship to Sebastian Ebel on 30 September.”

Ebel, the chief financial officer and chief executive designate, said: “Our business performed well in the third quarter – despite the operational challenges in the European tourism sector.

“People want to travel. Holidays continue to top the list of planned spending – this has not changed. Although the entire European airline sector continues to face challenges, we have successfully ramped up our business with a significant increase in demand, and achieved a good third quarter. We are consistently tackling the operational challenges of the restart.”

As well as spending more money on their trips – primarily on longer stays and better accommodation – holidaymakers are also booking closer to departure.

A Manchester Airport spokesperson said: “The operational issues experienced by TUI at Manchester Airport in early June were the result of issues with TUI’s own operation, including the ground handling services that are contracted directly by the airline.

“As such, we welcome TUI’s confirmation that it will not seek compensation from Manchester Airport for the disruption its passengers experienced, contrary to some recent reports in the media.

“Manchester Airport has not enforced flight cancellations on any carrier, and we have been working closely with all our airlines to support them in operating their planned schedules.

When individual airlines have taken the decision to reduce their schedules we have worked with them to facilitate that. This was the case in May when TUI opted to cut six flights per day from its June schedule, due to resource challenges experienced by the airline and its appointed ground handler, Swissport.

“We understand the disruption that flight cancellations cause to passengers, which is why we have worked hard with our airlines to avoid capacity reductions at Manchester Airport, and have sought regular assurances from all of our partners regarding their operational capacity.”