TUI is bullish winter travel demand with bookings exhibiting “positive momentum,” the European travel conglomerate said Thursday. The outlook comes after summer bookings came in well ahead of last summer’s pace and, the company said, is driven by “strong consumer demand in the current macroeconomic environment and the popularity of our product offering.”
Germany-based TUI operates one of Europe’s largest fleet of passenger jets, based at airports across the continent. According to Cirium Diio schedule data, its busiest airport markets by seat capacity are Manchester and London Gatwick in the UK, followed by Brussels. Other major markets include Birmingham, Amsterdam, and Dusseldorf. At the country level, the UK and Germany are especially important. The company and its airlines target leisure travelers from northern European cities, flying them to sunshine markets like Spain, Greece, Turkey, Egypt, Florida, and the Caribbean. It happens to be one of Boeing’s most important European customers, with a current fleet of 145 jets including 19 787s and 37 737 Maxes. Data from Cirium’s Fleets Analyzer shows the company with another 44 Maxes — a mix of -8s, -9s, and -10s — on firm order.
In volume terms, this year’s summer season reached 96% of pre-Covid levels of demand. But average selling prices are much higher — up 8% versus last summer and up 27% from summer 2019. TUI extended its summer schedule into the fall for selected destinations this year, notably Turkey and Greece. As for the winter season, which typically starts in November, the company said in an investor update that booking volumes are up 15% versus last year, with average selling prices up 4%, and a “promising booking situation across all key source markets.”
TUI offers a wide range of travel services, from hotels to cruises to holiday packages. Its airline operations fall within a division it calls “markets and airlines,” which is “set to achieve a significantly improved [financial] result” for the July-to-September quarter, relative to the same quarter last year.
Europe’s airlines enjoyed exceptionally strong leisure demand this summer, which they hope will continue. At the same time, however, climate disruptions such as wildfires in Greece have proved challenging. More recently, rising fuel prices have returned as a headwind. Europe’s airlines and travel companies are, in the meantime, concerned that the current strength in demand could fade as post-Covid consumer spending normalizes. Is this just consumers releasing pent-up travel demand after options were limited during the pandemic? Or is this a new normal?
“TUI is well positioned as we head into the new financial year,” CEO Sebastian Ebel said. “The positive trading momentum is continuing, and I am very optimistic for the coming Winter and Summer seasons.” Offering more specifics, he said, “Our traditional short- and medium-haul offering to Greece, Turkey, the Canaries, and the Balearics continue to prove popular with our customers, with all key destinations benefiting from higher demand against Summer 2022. We have seen strong demand in the final weeks of the summer season which traditionally runs to the end of October … Short- and medium haul destinations including the Canaries, Egypt, and Cape Verde are set to form a key part of the upcoming Winter program with Mexico, Thailand, and the Dominican Republic expected to be significant long-haul destinations.”
TUI will report financial results for its full fiscal year that ends in September in early December.
