TUI’s Financial Performance Results in Loss at Its Year End

TUI’s financial performance has resulted in a Year-End loss in its full-year results published on the 14th of December. Like many airlines, TUI has suffered as a result of pandemic restrictions. In addition, following the surge in demand for flights after pandemic restrictions were lifted, it also had to deal with delays and cancellations at airports

These were due to staff shortages resulting from layoffs during the pandemic, as fewer staff were needed. Despite these issues, TUI was only moderately affected. This is because it was one of the airlines that took a proactive stance (along with easyJet and British Airways) in cutting down the number of flights when airports, such as Heathrow, were having difficulties with congestion due to high passenger numbers.

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TUI’s Financial Performance

It appears that TUI’s financial performance, even though it is currently making a loss, is still better than last year. According to the latest figures, TUI made a loss of 212.6 million euros in the 12 months up to September 30th 2022. However, in the full year’s results for 2021, TUI’s financial performance was even worse, making a loss of 2.4809 billion euros.

The fact that the company’s losses have been reduced by approximately 12 times indicates the fact that at least TUI’s financial performance has improved considerably since last year. This is also shown by the Company’s EBIT (earnings before interest and tax) which is showing a positive figure of 320 million euros as opposed to a negative 2.0128 billion euros achieved in 2021. The fact that EBIT is positive, whereas when considering the whole picture the company is making a net loss, indicates the fact that loan payments may be having an impact on the company’s profit. This means that the company may be paying higher interest on its loans.

In terms of revenue (total money received) TUI financial performance has improved significantly. The latest financial release shows that the company’s revenue was 16.5449 billion euros in the 12 months up to September 30th 2022. This is a significant improvement from the previous year when it was 4.7316 billion euros. This is an increase of over 3 times, indicating that the company is able to attract more customers now. The fact that revenue has increased over 3 times in the past year whereas the net loss has reduced over 12 times indicates that the company is becoming better at cost control.

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The Company’s Response

Although it is still making a loss, TUI’s financial performance is improving. Chief Executive Officer Sebastian Ebel, has said that the company only started to take off this summer after restrictions were lifted and even then had to deal with the war in Ukraine. He added that the positive EBIT is encouraging and that the company is making an effort to work off its debt commitments.

All in all, it does appear that TUI’s financial performance is improving but unfortunately at the moment is making a profit due to the legacy of Covid and the war in Ukraine. It is not alone here. Fellow European airline easyJet is also making losses for the same reasons. This has put a strain on operations as well as increased costs for all airlines. We have to see how this progresses. 

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Amuthan Chandrarajan
Amuthan Chandrarajan
Aviation Reporter - Amuthan has a background in residential and commercial real estate. He also has a keen interest in aviation and travel and has visited many countries. Amuthan has a sound knowledge of business and finance.  He has gained a Master of Business Administration and has become a Chartered Management Accountant. 


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