TUI to pursue compensation from airports for disruptions caused by travel chaos

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TUI Group has revealed an underlying loss before interest and taxes of $43.53 million (€42.5 million) for the period between October 1, 2021, and June 30, 2022, after the recent travel chaos severely impacted the German travel operator’s performance.  

The travel and tourism company revealed that it missed earnings forecasts for Q3 2022 due to operational disruptions related to ground staff shortages and travel chaos across the European travel sector. The company booked a $76.77 million ($75 million) charge in its accounts related to the recent interference and said it will pursue compensation from the affected airports, naming Amsterdam Schiphol Airport (AMS) as the largest source of disruption.  

“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.  

TUI was forced to cancel around 200 passenger flights in May and June 2022, particularly due to problems at Manchester Airport (MAN). The cancelations were a result of the United Kingdom’s struggle to deal with a sharp increase in passenger demand for air travel while its airports battled with staff shortage post-pandemic.  

“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 company said its bookings during Q3 are 90% of Summer 2019 levels. The company carried a total of 5.1 million passengers, resulting in revenue reaching $4.54 billion (€4.43 million) compared to $665.5 million (€649.7 million) in 2019. 

However, TUI Group aims to return to positive performance for the remaining months of the summer season, with the company saying that bookings for July and August 2022 stood at 94% of pre-pandemic levels.  

“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. 


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