The TUI Group, the world’s largest holiday company, needs a summer recovery to relieve the strained finances.
It relies on vaccinated people who go abroad in the peak months despite tightened travel restrictions.
Germany-based TUI, which took 23 million people on vacation each year before the pandemic, secured several federal government bailouts to survive.
The company currently had financial resources of EUR 2.1 billion.
“That should last until the summer, until business starts in the summer,” TUI boss Fritz Joussen told reporters when they called.
However, there is still great uncertainty about travel in the main vacation months of this year. TUI said advances in the UK’s advanced vaccination program would support demand.
When asked how long the money could last and whether further state aid would be needed, Joussen said: “I would say we are in a very good position.”
According to Jefferies analysts, TUI had around seven months of liquidity unless holidays were canceled and no refunds were made.
In Great Britain, TUI’s largest market with Germany, the government has advised people not to book trips abroad for the summer as the country tightened controls through quarantine hotels and other tests.
The UK’s recent actions are aimed at combating new variants of the virus that vaccines may not work against.
Joussen shrugged off the risk of new variants. “This time (summer) we have vaccinations and good tests so I’m very confident,” he said.
TUI plans to operate 80% of 2019 capacity this summer as 2.8 million bookings have already been made. In the successful Covid 19 summer of 2020, around 25% of the capacity was used.
The company cut costs during the pandemic. In the three months to the end of December, the monthly cash outflow amounted to EUR 300 million after an expected EUR 400 to 450 million.
This resulted in adjusted earnings before interest and taxes (EBIT) for the quarter of € 699 million.
TUI’s net debt rose to 7.2 billion euros during the pandemic and must begin repayments in 2022. Joussen said selling assets or raising new equity would help, reiterating his comments in December.
“It’s very clear that the math is saying we need $ 1.5 billion to $ 2 billion,” he said, adding that this could be achieved through divestments and more equity.
