TUI airs Brexit concerns amid €45m Boeing 737 Max losses
TUI has today announced that Brexit is a “main concern” for the company.
In its first quarter trading update, the travel company revealed that despite losses due to the Boeing 737 Max, it has seen the benefits of a major competitor’s collapse.
But it doesn’t consider itself in the clear yet, saying that it is focusing on “alleviating potential impact” of Brexit on its trading and operations.
The holiday company confirmed that the grounding of the Boeing 737 Max plane caused replacement costs of €45m, and could cost millions more if it remains grounded for the rest of the financial year.
As well as this, its revenue was affected higher cost bases, losses from the devaluation of Turkish lira, and higher fuel costs.
Despite this, the company said it is “pleased” with the current development of its markets and airlines business, with exceptional booking trends following the insolvency of key competitor, Thomas Cook.
Throughout the course of the year, it also plans to open 17 new hotels.
The company commented: “FY20 in terms of booking trends has started exceptionally well, with the UK delivering its best bookings volume month in the company’s history.
“We are pleased with customer booking development to date for both programmes, however the Boeing 737 Max grounding continues to weigh on our operational performance, with an extended grounding now expected for the rest of the financial year.
“We will continue to focus and deliver on our four strategic initiatives as outlined in our FY19 full-year results update; progress of our initiatives and our markets and domains transformation programme are on track.”
Addressing the recent exit of the UK from the EU, it added: “A main concern remains whether our airlines will continue to have full access to EU airspace after the transition period.
“We are continuing to address the importance of there being a special and comprehensive agreement for aviation between the EU and the UK post-Brexit to protect consumer choice with the relevant UK and EU decision makers.
“We follow the political negotiations closely and continue to develop scenarios and mitigation strategies for various outcomes, including the potential exit of the UK from the EU on 31 December 2020 without a comprehensive free trade agreement, with a focus to alleviating potential impacts from Brexit for the group.”
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