8,000 jobs at risk as Tui faces ‘greatest crisis’ for travel industry

By:

Add as a preferred source on Google
Tui has reported record revenue in its half-year results, not long before it take flight from London markets for Germany.
Tui has reported record revenue in its half-year results, not long before it take flight from London markets for Germany.

Holiday operator Tui said 8,000 jobs are at risk as it seeks to cut costs due to the coronavirus pandemic, which has presented the “greatest crisis” ever faced by the travel industry.

The company said this morning that the coronavirus crisis has forced it to accelerate its transformation plan.

Tui is aiming to reduce its overhead costs by 30 per cent across the entire group, meaning 8,000 roles will either be cut or not recruited.

The coronavirus pandemic, which has put the tourism industry on hold as governments have implemented travel bans and restrictions on movement, will impact Tui’s earnings this year.

The company said it expects turnover and earnings before interest and tax to “decline significantly”.

In the six months to 31 March, Tui reported a widening earnings before interest and tax loss of €813m, driven by costs related to the coronavirus crisis. The year got off to a strong start, and January was Tui’s best ever month for bookings.

However, the escalation of the coronavirus crisis at the end of March saw costs mount.

Total costs in March related to both Covid-19 measures and the grounding of the Boeing 737 Max amounted to €470m.

“The tourism industry has weathered a number of macroeconomic shocks throughout the most recent decades, however the Covid-19 pandemic is unquestionably the greatest crisis the industry and TUI has ever faced,” the company said in a statement.

Despite the challenges caused by the coronavirus crisis, Tui said demand for holidays will remain strong, and that its transformation plan will help it bounce back after the pandemic.

UK bookings for the winter 2020/21 season are up eight per cent and summer bookings for next year are “looking positive on small volumes”.

Tui said: “We expect travel will be different for the remainder of this year, however we strongly believe our customers will still want to holiday.

“Online enquiries to our website indicate to us that customers are still actively researching holidays and destinations; customers want to travel as soon as tourism can take off responsibly and safely.”