TUI Narrows Losses On N. Africa Return
German travel and tourism group TUI said demand for holidays in North Africa was recovering, as it reported a smaller than expected second-quarter loss.
"The situation in Tunisia is especially encouraging, but we are seeing some pick-up in Egypt too," chief financial officer Horst Baier said.
Tour operators such as TUI Travel and Thomas Cook were hit hard last year as European tourists shied away from North African destinations such as Tunisia and Egypt following uprisings.
Tourists are now returning, though numbers are not expected to recover to pre-uprising levels until next year or even longer for Egypt.
Tour operators are also battling a drop of around 30 percent in bookings to Greece from Germans, the world's biggest spenders on foreign holidays, who have been put off by anti-German sentiment following the country's financial bailout.
"I regret this situation very much and I really cross my fingers that people are coming back and decide to book a holiday in Greece," Baier said.
TUI reported a second quarter loss of EUR€224 million (USD$290 million).
Travel companies traditionally post a loss over the period, with profits only coming as payments arrive for summer travel.
It confirmed an outlook for moderate turnover growth and a slight improvement in EBITA for the fiscal year to end-September.
It said this would be driven by TUI Travel, which on Wednesday said it expected a strong summer showing, and higher prices and occupancy at TUI's own hotels and resorts division.
TUI wants to focus solely on its tourism operations and is in the midst of a complicated plan to exit its remaining 39 percent stake in shipping company Hapag-Lloyd, which on Thursday said high bunker prices resulted in an operating loss of almost EUR€100 million in its first quarter.
CFO Baier said TUI was evaluating all its options, including an initial public offering - which it may call from July 1 - or a sale of its stake to third parties.
Echoing Hapag-Lloyd's management, Baier said TUI would wait for a clear improvement in the shipping industry and stable capital markets before taking another swing at a flotation.
WestLB analysts said on Thursday they did not expect an IPO before the end of the year.