TUIs financial performance has resulted in a year -end profit for the company in the 12 months leading to September 30th 2023. In the company’s annual report, released on the 6th December, the company made a profit of 455.7 million euros. This is far higher than the multi million euro loss made in the previous year of 212.6 million euros. This shows that on the whole TUI’s financial performance has been good this year entering into the profit zone when taking into account the full year. The company has also offset the losses at half year of 558 million euros which effectively began in the third quarter where the company made a profit of 52.5 million euros.
As we know however the situation has not been easy for any airline and like many, TUI’s financial performance has been heavily affected by the pandemic. When the pandemic struck governments around the world restricted foreign travel leading to a slump in demand for flights. In addition. even after restrictions were lifted. airlines continued to have problems as there was a surge in demand for flights and airlines were unable to cope as layoffs during the pandemic when there was less demand meant that they were now short staffed. As a result there was a lot of congestion at airports leading to mass flight delays and cancellations. TUI has however been credited for taking the initiative and reducing flight numbers before airports introduced mandatory restrictions.
TUI’s Revenue
In terms of TUI’s revenue, the company has made 20.6659 billion euros in 12 months up to September 30th 2023 which was 24.9% higher than the 16.5449 billion euros made in the previous year. This shows that the improvement in TUI’s financial performance is partly due to an improvement in customer receipts and therefore popularity. In addition however the fact that profitability has improved to a greater extent indicates that there has been an improvement in cost control as well
The company’s CEO Sebastian Ebel has responded to TUI’s financial performance saying that the company is on the right track. In addition he comments that profit across all its businesses have improved. As we know, TUI operates hotels, cruises as well as providing other holiday experiences (such as tours). He also adds the 13% more customers were traveling with TUI in 2023 when compared to the previous year. The company has also paid back state loans allowing it to invest further in its growth.
Sustainability
The company does appear to not only be focusing on TUI’s financial performance but also has a sustainability plan ( this is a plan to ensure that the company’s growth is in harmony with the environment and society). In January 2023, the company published their Sustainability Agenda, which set out new plans to reduce carbon emissions by nearly a quarter. Ebel comments that the targets set have been validated scientifically, which is a first among other leisure flight operators. He does however comment on the fact that political obstacles can make it harder for the airline to be more climate friendly. An example of this is that air traffic control has still not been standardized over Europe which means that flight planning cannot be as climate friendly as it could be. He estimates that if this would done carbon emissions from flights across Europe would be 5-10% less.
As one can see, it is good news that TUI’s financial performance at year-end is back in the profit zone. The company is also investing in further growth and is also trying to improve its environmental sustainability credentials. We have to wait to see how this progresses.
