TUI AG (LON:TUI) racked up a loss of €3.1bn in its latest financial year as it bore the full brunt of COVID-19 restrictions on travel.
The Germany-based travel operator also said it has reduced capacity for this winter’s season due to the new restrictions imposed across Europe following the second wave of infections.
Capacity over the winter will now be 20% of that originally planned compared to a predicted 40% in its last update.
Summer 2021 capacity is forecast at 80% of normal levels, TUI said, though this too might change with the conditions surrounding COVID-19.
Revenues in the year to end September 2020 were €7.95bn against €18.9bn a year earlier, while it saw a near €4bn swing into losses of €3.13bn.
TUI estimated that without COVID-19 it would have made a profit of €990mln or up slightly on the 2019’s €893mln, but the pandemic had cost it €3bn through impairments, hedges and other costs.
All of its operating segments swung to a loss with the biggest deficit at its airline operations with a €2bn loss and in cruises.
The travel group has needed three German-state backed bailouts to keep trading.
The first two raised €3bn with a third (for €1.8bn) awaiting approval from the EU over state funding rules. This latest funding will include a €500mln rights issue.
Net debt at the year-end was €4.6bn compared to €910mln a year earlier.
For the current year, TUI’s assumptions are that it will be’ a year of transition and profitable growth will return from 2022 onwards’.
“The additional financing package agreed strengthens our position and provides us with sufficient liquidity reserves in this volatile market environment, balancing out the presumed travel restrictions until the beginning of the 2021 Summer season.“