Following a significant performance hit from the recent travel disruption, TUI Group has disclosed an underlying loss before interest and taxes of $43.53 million (€42.5 million) for the period from October 1, 2021, to June 30, 2022.
The travel and tourism company disclosed that operational issues connected to ground staff shortages and traffic mayhem throughout the European travel sector caused it to underperform earnings estimates for Q3 2022. In response to the recent interference, the business recorded a $76.77 million ($75 million) charge in its books and announced it will pursue compensation from the impacted airports, identifying Amsterdam Schiphol Airport (AMS) as the primary cause of the interruption.
“The combination of unparalleled industry ramp-up after the COVID 19-pandemic compounded by a tight labor market has seen the aviation industry confronted with significant operational issues and disruptions, resulting in the increase of delayed departures and flight cancellations,” TUI said in its Q3 Interim financial report published on August 10, 2022.
“This has been mainly caused by third-party suppliers and airports due to a shortage in ground handling and airports security staff, reliability issues with lease-in partners, and supplier maintenance delays,” the company added.
Due to issues at Manchester Airport, TUI was forced to cancel almost 200 passenger flights in May and June 2022. (MAN). The United Kingdom struggled to manage a dramatic surge in passenger demand for air travel while its airports struggled with a post-pandemic workforce shortage, which resulted in cancellations.
“As a result, disruption costs increased by €75 million in Q3. […] In response, we have swiftly introduced several mitigations to improve resilience and customer experience, including the doubling of our standby aircraft, active management of third parties, and increased TUI staff at key customer touchpoints,” the financial update reads.
The corporation reported that summer 2019 levels were 90% of its third-quarter bookings. In comparison to $665.5 million (€649.7 million) in 2019, the airline handled 5.1 million passengers, generating revenue of $4.54 billion (€4.43 million).
Though the business reported that reservations for July and August 2022 were 94% of pre-pandemic levels, TUI Group hopes to turn around its summer season’s remaining months.
“We continue to expect a strong travel summer 2022 with capacity close to pre-crisis levels and significantly positive underlying EBIT for the full year,” TUI added.