Cook’s failure on Monday (23 September) came just a week before Tui’s full-year trading period (1 October 2018 to 30 September 2019).
In a trading update issued on Tuesday morning (24 September), Tui said while summer 2019 was “closing out in line with expectations”, it remained a challenging market environment in which to operate.
The operator cites the ongoing grounding of the Boeing 737 Max, airline overcapacity and the continued uncertainty around Brexit.
“These external challenges will continue in FY20 [full-year 2019/20] – therefore, we will focus on becoming more cost-competitive in our markets and airlines business to protect and extend our market share where possible,” said Tui Group chief executive Fritz Joussen.
Tui will post its full-year 2018/19 results on 12 December.
On Cook, Tui said it was “preparing measures” to support Tui customers booked on Thomas Cook Airlines flights. “Where these are no longer operated, replacement flights will be offered,” said Tui.
“We are currently assessing the short-term impact of Thomas Cook’s insolvency under the current circumstances, on the final week of our FY19 financial result.”
Joussen said Tui’s vertically integrated business model was proving resilient amid the tough trading environment.
The business expects its full-year finances to come in around 26% down on last year, in line with its guidance dating to March.
Tui said the grounding of the 737 Max, should it continue throughout the entire summer season, as it has, would dent its full-year earnings by around 25% (€300 million).
Looking ahead, Tui said trading since its third-quarter update on 13 August had been “stronger in both bookings and average selling price”, with Turkey and North Africa “seeing a clear return to growth”.
Tui has sold a third of its winter 2019/20 programme, which it said was “broadly in line” with last year. However, weaker demand “remained evident” with bookings down in line with capacity reduction of around 2%, albeit with sales at an average selling price up 4% on this time last year.
On the 737 Max, of which Tui has 15, the operator added: “Resumption of the 737 MAX remains subject to the clearance decision of the civil aviation authorities.
“To ensure we are sufficiently covered for peak periods during our winter 2019/20 programme, we anticipate a smaller level of aircraft replacement costs to be incurred, compared to summer 2019.”
