Travel business picks up: Billion capital increase at Tui

2021-10-07T05:51:11.001Z

Traveling, sorely missed in Corona times, is becoming easier again. TUI customers catch up on what they have missed. But the indebted group wants to get more air. The major shareholders are pouring billions in, also to repay part of the state aid soon.

Traveling, sorely missed in Corona times, is becoming easier again.

TUI customers catch up on what they have missed.

But the indebted group wants to get more air.

The major shareholders are pouring billions in, also to repay part of the state aid soon.

Hanover - The world's largest tourism provider Tui is gradually recovering - the owners are also significantly increasing the finances for the planned repayment of state aid.

The Hanoverians reported on Wednesday of noticeably increasing bookings in the past summer.

In addition, the interest of customers for the upcoming winter and the coming year is increasing.

At the same time, the TUI supervisory board cleared the way for a new capital increase.

The state-supported group, which has come under great pressure during the Corona crisis, wants to expand its scope.

An important credit line no longer has to be used, it said.

Lufthansa recently issued new shares to allow taxpayer money to flow back.

In the main summer season of this year, customers booked a good 5.2 million trips, according to Tui, and around 1.1 million more have been added since the last interim result. Compared to July and August 2020, when business was very limited due to the pandemic, there was a doubling. “In the last few weeks in particular, a strong upward trend has been observed.” Looking back on the more informative summer 2019 before Corona, the bookings in Germany and the Netherlands would have been higher.

Tui is now planning 60 to 80 percent of the normal program for winter 2021/2022.

Popular destinations are the Canary Islands, mainland Spain, Egypt and Cape Verde.

Most of the restrictions on short and medium-haul destinations have been lifted, and vaccination rates are high in the EU and the UK.

"Therefore, a further increase in international travel can be expected this winter," estimates Tui.

Parts of the summer program were also extended into autumn.

In the case of long-term goals, it is assumed that recovery will be slower.

Among other things, the group had also put earlier plans to expand its own airline Tuifly with a few long-haul machines, on hold.

The controversial austerity course at the airline had also revolved around the extent of the Group's own capacities that were still needed.

Thanks to the more stable, but often quite short-term bookings, there is currently an “increase in the utilization of the fleet in the last two to three weeks before departure,” says Tui. In the medium term, the 1.6 million deals so far for the summer of 2022 are "very encouraging". On average, the prices were 15 percent above the level of 2019. Tui had stated that this was not due to direct increases, but mainly because Customers treated themselves to more expensive offers. According to a presentation to investors, it is hoped that the entire business will “normalize” by 2023 or 2024 at the latest.

However, the group is not relying solely on increasing income from ongoing business. After an increase of over 500 million euros in January, he now wants to create more financial leeway through a further capital increase. New shares for 1.1 billion euros are to be issued. The Russian main owner Alexej Mordaschow, whose group currently holds 32 percent in Tui, wants to go along with it in order to keep his stake constant overall.

"With the capital increase, we are taking a big step closer to our goal of rapidly reducing government loans," said CEO Fritz Joussen.

A loan of 375 million euros granted by the KfW development bank is no longer necessary because of the money, and the use of this credit line “drops to zero”.

In addition, debts with other banks are to be reduced.