TUI slumps again as losses plague Europe’s biggest holiday firms


FRANKFURT • TUI AG fell as much as 8% after Europe’s biggest holiday firm detailed how a glut of flights and hotel rooms is hurting earnings, giving investors more reasons for concern following a profit warning last week.

The loss for the quarter through December more than doubled, with no prospect of a turnaround because prices are depressed by unfilled capacity, TUI said in a statement yesterday.

Uncertainty around Brexit is also roiling UK sales and 2018’s hot summer has put people off booking ahead in case there’s a repeat.

The stock traded 4.2% lower as of 9:56am yesterday in London, where TUI has its primary listing. It fell 19% on Feb 7 following the profit warning.

TUI’s problems look mild by comparison to those afflicting rival Thomas Cook Group plc, which fell 75% last year after splurging on rooms it couldn’t fill, and is mulling a sale of its airline arm to raise cash and avoid a rights offer.

TUI CEO Fritz Joussen said he’ll be an “active observer” of that process, but isn’t in talks with Cook.

Hanover, Germany-based TUI said on Feb 6 that operating profit will be flat in the 12 months through September after five consecutive years of double-digit gains.

Joussen said yesterday the company’s cruise-ship business should help offset declines at the tour-operator arm. It also owns a far larger proportion of its hotels than Cook, paring costs and giving it greater flexibility over pricing.

TUI stock is down 18% this year compared to a 14% decline at London-based Thomas Cook. — Bloomberg