By Scott Kanowsky
Underlying earnings before interest and taxes contracted by €27 million despite strong travel demand spurring the German group on to its first "broadly break-even quarter post-pandemic". When excluding flight disruption costs, adjusted core earnings rose to €48 million.
That surge in travelers after the COVID-19 crisis, along with a tight labor market, sparked "significant operational issues" across the aviation industry, Tui said.
"This has been mainly caused by third party suppliers and airports due to a shortage in ground handling and airports security staff, reliability issues with lease-in partners, and supplier maintenance delays," the company added, with the costs from these disruptions in the three-month period to the end of June growing to €75 million.
But flight cancellations were "rare" compared to other airlines. Tui said it scrapped less than 200 outbound air journeys in May and June, representing under 1% of its summer schedule. The company operated at 82% of capacity in the third quarter, while summer 2022 passenger figures were also "on track" to approach pre-pandemic levels.
The firm backed its expectations for a return to positive underlying earnings during the 2022 financial year.
However, Tui warned that short-term risks to the outlook remain, including a renewed uptick in COVID-19 cases, higher input costs stemming from the war in Ukraine, and continued supply chain constraints.
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