By Marleen Kaesebier and Joanna Plucinska
(Reuters) -Europe’s largest travel operator TUI flagged a 1% drop in summer bookings on Wednesday, helping knock its shares down nearly 7% in early trading.
TUI, which maintained its 2025 outlook, blamed the shift in summer bookings on a later Easter, which impacted most airlines’ January to March reporting – though European carriers Air France-KLM and British Airways-owner IAG so far have reported a stronger January to March.
In a statement, CEO Sebastian Ebel said that given economic conditions, 2025 will be “challenging”. “Europe needs new momentum. We must return to an overall economy that is growing,” he said.
Shares in the company were down 6.8% at 0712 GMT, with analysts and investors pointing particularly to the German market as a weak link.
“The weakness in Germany could suggest we move away from the top end of guidance (if trends continue),” analyst Ed Vyvyan at Redburn Atlantic told Reuters.
A slowdown in bookings growth also hit TUI shares at the time of the group’s last earnings report in February.
“We are clearly facing a slowdown in the level of demand (at TUI), notably in Germany,” Fehmi Ben Naamane, an analyst at ODDO BHF, told Reuters.
Also on Wednesday, TUI reported an underlying loss before interest and taxes of 206.8 million euros ($231.4 million) in the January-to-March quarter, wider than the 188.7 million euro loss it reported a year ago but narrower than the 224 million euros expected by analysts polled by LSEG.
Ebel said on a media call that booking momentum had picked up since May 1 and summer bookings would likely be on par with last year.
“You can lose in winter and win in summer,” Ebel told reporters, adding that the second quarter was the least important quarter of the year.
TUI has sought to diversify its income, expanding in Asia and central Europe, in an effort to bring in new streams of revenue as fears grow over European demand.
Ebel said it will likely take three years for the benefits of that strategy to show up in the TUI balance sheet, but that the company had managed to avoid losses tied to the new projects.
The group’s quarterly revenues slightly improved year-on-year to 3.71 billion euros from 3.65 billion euros in the same quarter last year.
($1 = 0.8937 euros)
(Reporting by Joanna Plucinska and Marleen Kaesebier; Editing by Ludwig Burger, Janane Venkatraman and Jan Harvey)
