(Bloomberg) -- TUI AG, the world’s biggest tour operator, said it remains on course to post a profit this year, with bookings and prices looking strong for the rest of the summer even as Europeans suffer a cost of living squeeze.
The firm expects to report “significantly positive” underlying earnings before interest and tax for the 12 months through September, it reiterated Wednesday. Hanover, Germany-based TUI had a profit of 48 million euros ($49 million) in the fiscal third quarter, before costs of 75 million euros from airport upheaval.
Europe’s travel industry is seeing bumper summer sales as an end to Covid curbs unleashes pent-up demand for vacations. Airlines and holiday firms are reaping profits from high air fares and room prices, even as they grapple with a wave of delays and cancellations linked to a region-wide labor shortage.
TUI traded 0.8% higher as of 10:39 a.m. in London, where the stock has its main listing, after chief executive-designate Sebastian Ebel said on a call that winter sales are showing overall good momentum and customer volumes are expected to increase further next summer. The stock earlier slid 4.3%.
Ebel, who succeeds Fritz Joussen in October, said levels of disruption have been back to normal this month and predicted an end to the turmoil over the winter as fewer people travel and resilience improves.
TUI said that average prices are currently around one-fifth above pre-coronavirus norms, with bookings at 90% of the summer 2019 level.
Cruises Boost
The company’s hotels and resorts division posted positive results for the fourth quarter in a row, while the cruises arm ended losses earlier than expected, according to the release.
Ebel said that TUI remains committed to further reducing debt and with it German government exposure, and that the company is on course to meet mid-term goals including leverage targets.
(Updates with comments from CEO-designate starting in fourth paragraph)
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