Shares in travel-and-tourism giant Tui sink

Tui reported a $1.8 billion loss in the six months to the end of March, as the continuation of travel restrictions due to the COVID-19 pandemic left airplanes on the ground and hotel rooms empty.

Travel-and-tourism giant Tui reported a €1.5 billion ($1.8 billion) loss in the six months to the end of March, as the continuation of travel restrictions due to the COVID-19 pandemic left airplanes on the ground and hotel rooms empty.

Shares in the German group, which operates hotels, airlines, cruise ships, travel agents, and is a constituent of London’s midcap FTSE 250 MCX, -0.27% index, fell 2%.

Tui TUI, -2.13% posted revenue of €716 million in the first half of its fiscal year, a 89% decline from the same period in the year prior. Tui’s liquidity as of May 7 was €1.7 billion, down from a €2.1 billion cash pile as of the beginning of February. Many travel and tourism companies have burned cash since the COVID-19 pandemic all but halted global travel more than a year ago.

The group was optimistic about the summer travel season, even as summer bookings remain at 69% of 2019 levels. Tui said 2.6 million customers were currently booked for summer 2021, a slight decline from levels reported in March, due to travel restrictions. Tui said it expects to be profitable again by September.

“The flight paths out of the crisis have begun to be mapped out for the world’s largest travel and tourism operator but the damage caused by the harsh rays of COVID run deep,” said Susannah Streeter, an analyst at Hargreaves Lansdown.

While Tui shares slipped in London, the FTSE 100 UKX, +0.82% — the index of the top U.K. stocks by market capitalization — climbed 0.82% higher, outpacing other major European indexes as equities across the continent rebounded. The FTSE 100 fell more than 175 points on Tuesday, the largest one-day point decline since September 2020.

Analysts pointed to better-than-expected economic data as a force behind the acceleration among U.K. stocks. The U.K. economy expanded by 2.1% in March, outpacing analysts’ expectations of 1.5% growth and confirming the pathway to a strong rebound after the recession caused by COVID-19.

“The FTSE is outperforming its European peers as GDP [gross domestic product] data points to an economic turnaround,” said Sophie Griffiths, an analyst at Oanda. “Delving deeper into the numbers, the monthly GDP for March showed a stronger-than-expected rebound in the economy as businesses prepared for the easing of lockdown restrictions and the opening of the economy.”

By Jack Denton www.marketwatch.com