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'Turkey will be back big time'

Joussen said Tui’s summer sales were “slightly below last year in terms of load factors” and added they were “more skewed to late bookings”.


“We are an average 60% sold in all markets, slightly lower than last year," he said. "Bookings are 1% down, but this is more related to the capacity we have in the market; we have been cautious in our planning.”


The late Easter and “competitive pressure” was blamed for increased interim losses. “The main issue is over-capacity into Spain; people have better prices because of over-capacity and we have lower margins," said Joussen.


"It will be a trend continuing into the second half of the year, but we have a counter-effect in Turkey. Turkey will be back big time, although it is not as important in winter and the benefits will only come in the second half.”


He said Brexit had had some effect, making the pound weaker, but added: “It was not a very strong trend. I think the stronger trend is late booking. People somehow think capacity will be available and are waiting to see if the summer is hot.


"Do I see some speeding up of bookings right now? No, but I don’t see a specific Brexit-related booking pattern either.”

737 MAX deliveries on hold

The resurgence of Turkey has exacerbated overcapacity in Spain, particularly the Canaries, but Joussen said the grounding of the Boeing 737 MAX was “not a silver bullet” to solve the problem.


Tui has 15 MAXs and another eight on order, spread throughout its UK and European operation.


“We have taken out capacity, as much as we could. We did not want to sacrifice market share, so where it was strategic, we kept our position.”


He added: “If you just take out capacity, you lose slots. It’s not that easy; many of the aircraft are half sold; you can’t just take out aeroplanes.”


Tui will hear by the end of the month whether the MAX will re-enter service in time for the summer peak. “We have two scenarios; July or not at all for the summer season.”


The earlier date for the MAX’s return would affect profits by 17%, Tui estimates, while the aircraft’s absence for the full summer would have a 26% impact on expected full-year pre-tax profits of €1.177 billion.


“We won’t take any [new] deliveries until we have clarity. Of course we are in discussions, but that is our second priority because we need to get our customers on their holidays.”

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