By Anthony O. Goriainoff
Shares in TUI AG fell as much as 4.3% in early trade on Wednesday after the travel company missed earnings forecasts after booking a charge related to air traffic disruptions.
The London-listed German travel operator reported an underlying loss before interest and tax for the quarter ended June 30 of 27 million euros ($27.6 million), compared with a loss of 669.8 million euros a year earlier and a forecast from UBS analyst Cristian Nedelcu. for a profit of 75 million euros.
TUI booked a €75 million charge in its accounts related to air traffic disruptions. The European travel sector has been hit in recent months by staff shortages as airlines and airports laid off workers during the pandemic crisis and ground crew strikes at several major airports.
Shares at 0742 GMT were down 5.10 pence, or 3.6%, at 138.30 pence, off a low of 137.25 pence earlier in the session.
Despite the surcharge, TUI said it expects to return to positive underlying EBIT for the full year as it benefits from a return to travel following the lifting of coronavirus-related restrictions. It carried 5.1 million passengers during the quarter, generating revenue of €4.43 billion compared to €649.7 million in the year-ago period. An analyst polled by FactSet had a revenue estimate of 4.30 billion euros.
Excluding extraordinary and other one-time charges, the company made a loss before interest and taxes of 42.5 million euros for the quarter ended June 30 compared with a loss of 748.0 million euros for the third quarter of 2021.
TUI said booking momentum continued to be encouraging with average fares significantly higher than in 2019.
The company said bookings were at 90% of levels seen in 2019, with 11.5 million customers booked for summer 2022. It added that bookings for July and August were at 94% of levels seen in summer 2019, and that it expects to reach almost the same level of bookings in the summer of 2022 as in 2019.
“Our business performed well in the third quarter – despite operational challenges in the European tourism sector,” said chief executive Sebastian Ebel.
“We continue to expect a strong travel summer 2022 with capacity close to pre-crisis levels and underlying EBIT clearly positive for the full year.”
Email Anthony O. Goriainoff at email@example.com