Tui travel firm warns Boeing grounding to hit earnings

In a statement on Friday, the Hanover-based holiday company said that it expected earnings for this year to be 17 per cent below the €1.2bn achieved in 2018, assuming the currently grounded Boeing craft resume flights in mid-July. It had previously guided that earnings for 2019 would be “broadly flat”.

However, if there was no indication that the planes would be allowed to resume normal schedules in July, Tui said that it expected earnings would be 26 per cent below 2018 levels, a decrease of around €300m.

Shares in the travel group fell about 10 per cent in early London trading.

The Boeing 737 Max has been grounded after two deadly air crashes of the model showed similar patterns of behaviour. More than 50 countries have taken steps to limit the use of the planes ranging from grounding any held in national fleets to preventing them flying in their airspace.

Tui’s fleet, which totals around 150 aircraft, includes 15 of the grounded Boeing planes in the UK, Belgium, the Netherlands and Sweden. A further eight 737 Max planes are due to join the fleet in May.

Along with other tour operators, Tui said that it had “made arrangements in order to guarantee customer’s holidays”. These included using spare aircraft in its fleet, leasing additional aircraft and extending the use of planes that were meant to be replaced by the new 737 Max intake.

The operator said that, given “considerable uncertainty” around when the 737 would return to service, it had taken precautions up until mid-July to cover the major Easter and summer holiday booking seasons.