Holiday giant Tui has revealed the grounding of Boeing’s 737 Max planes saw annual earnings nosedive and warned it could cost it up to another 400 million euros (£337 million) over the year ahead.
The tour operator said Boeing’s move to ground the 737 Max fleet after two fatal crashes left it nursing a 29.5% plunge in pre-tax earnings to 691 million euros (£582 million) for the year to September 30.
It warned over a further 130 million euro (£110 million) impact from the grounding in 2019-20 – but said this could rise by a further 220 million euros (£185 million) to 270 million euros (£228 million) if the aircraft does not return to service by the end of April.
However, Tui is being given a boost by the collapse of rival Thomas Cook in September.
It said it has seen a surge in new customers booking thanks to Thomas Cook’s demise – with summer 2020 bookings up by 18% in the UK.
The group said this should help drive a return to profit growth over 2019-20, assuming the 737 Max grounding is lifted as expected.
It is expecting underlying earnings before interest and taxes to rise to between 950 million euros (£801 million) and 1.05 billion euros (£885 million) over the year ahead.
Fritz Joussen, chief executive of Tui, said: “Even in a challenging year for the tourism sector, Tui delivered a strong operating performance, a robust balance sheet and growth in its hotels and resorts and cruises core businesses.”
By Holly Williams
