TUI Airways hit hard by Brexit and 737 Max grounding
Friday, August 16, 2019
The airline had already issued two previous profit warnings in 2019. However, no one really expected to see such a drop in their quarterly profits.The company expects a 26% reduction compared to 2018's earnings of €1.18bn. The company still expects to deliver a solid 2019, as stated by Friederich Joussen (chief executive).
The 737 Max crisis will cost TUI around 300 million euros
As the second-largest European operator of the aeroplane, TUI was severely affected by having to ground all Boeing 737 Max aircraft. Their fleet includes 15 737 Max models and the company was expecting to receive another eight. After the complete grounding of the plane was announced, TUI had to lease replacement aeroplanes in order to avoid flight cancellations and delays. It is still unclear if the airline will be able to claim damages from Boeing.
Brexit uncertainty drives a decrease in bookings
During the third quarter, demand has been hurt by the uncertainty surrounding Brexit and what it will mean for airlines. Britons are choosing to stay in the United Kingdom during their summer holidays, and if they actually choose to go abroad, they are more likely to head towards Turkey or North Africa. This has hit TUI mainly because the airline focuses on destinations in continental Europe and especially in Spain. Summer bookings were down 1% for the airline and are expected to remain low in the final weeks of summer.
The future of TUI
The company will look into reducing its dependency on the European market. They are currently looking into foraying into emerging markets such as Brasil, India and Malaysia.
TUI flight delays and cancellations, claim compensation
Flight-Delayed is here to help them with any problem they may encounter. Especially if TUI refuses to compensate them for the time lost and possible damages caused. According to the flight’s route, passengers can be entitled to up to €600 in compensation (around £530).
If your TUI flight has been delayed or cancelled and you need assistance claiming your compensation, enforcing your rights or if you’ve ever been on a similar situation, we’ll check your flight for free and you can then decide to submit a claim with us on a no win no fee basis. Our 25% success fee covers all the legal costs we might incur in while claiming your compensation! Even if we have to go to court.