Holiday company TUI has said that it has reduced capacity for the coming winter season due to changing travel restrictions, and that it is continuing to evaluate options to boost its balance sheet which has been strained by the COVID-19 pandemic.
The Germany-based group, which is the world's largest travel company, said on Tuesday September 22 that its liquidity stood at €2 billion on September 20, down from €2.4 billion euros in mid-August, with the reduction being due to higher customer refund obligations.
Travel restrictions have hit the company hard, forcing it to cancel trips and change its schedule, and rising coronavirus infections across Europe mean that it has now reduced its already shrunken winter season by another 20%, it said.
Get a FREE Digital Subscription!Enjoy full access to Hospitality Ireland, our weekly email news digest, all website and app content, and every digital issue.
That means less future business, heaping more pressure on the group's finances.
"We continue to evaluate options to achieve the optimal balance sheet structure to support the business over the longer term," TUI said in its statement.
Sources say that TUI is considering a share sale of up to €1 billion to prop up its balance sheet. A German government bailout of €3 billion in debt has helped it survive the crisis so far.
Guidance For Next Summer
TUI stuck to guidance that for its summer season next year that it will operate 80% of its adjusted capacity and said that it is encouraged by early bookings.
News by Reuters, edited by Hospitality Ireland. Click subscribe to sign up for the Hospitality Ireland print edition.