TUI overcomes heatwave hit to post 11% hike in earnings

Holiday giant TUI has shrugged off a summer heatwave hit to its tour operator and airlines division to report a 10.9% rise in annual earnings, but it warned 'challenging' trading will continue.
By The Newsroom
Published 13th Dec 2018, 15:33 BST
Updated 9th Jan 2019, 08:27 BST
Hard-earned profits for TUIHard-earned profits for TUI
Hard-earned profits for TUI

The group said the prolonged hot weather across the UK and Europe, together with the impact of air traffic control strike action and the Brexit-hit pound combined to send earnings in the tour operator and airlines business down 14.6% to f449.8 million (£405.1m).

But an impressive performance in its hotels and resorts arm and cruises business offset the impact, helping underlying earnings rise to f1.22 billion (£1.1bn) for the year to September 30.

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TUI admitted it was a “challenging” year for the tour operator and airlines division and said this will continue into 2019.

Winter bookings for 2018-19 are 1% lower, while prices are down 2%. It said: “The weakness of pound sterling resulting from the Brexit vote, extended disruption caused by French air traffic controller strikes and a prolonged heatwave in northern and central Europe impacted the entire sector and were also reflected in the operating result delivered by markets and airlines, which fell short of the previous year’s levels.”

Rivals have also been knocked by the heatwave and strike action, with Thomas Cook issuing several profit wrnings.

But TUI said it expects earnings to grow at least 10% in 2019 as the rest of the business should offset the tough trading in the tour operator and airlines arm.

Related topics:TuiEuropeBrexit