June 3, 2019 / 2:58 PM / a year ago

Missed Boeing MAX deadline sends TUI shares to two-month low

FILE PHOTO: A TUI Boeing 787-8 Dreamliner prepares to take off from Manchester Airport, Britain, September 4, 2018. REUTERS/Phil Noble

LONDON (Reuters) - Travel company TUI’s contingency measures to cope with the grounding of Boeing 737 MAX jets were triggered on Monday, sending its shares down more than 4%.

The Boeing 737 MAX has been grounded globally after two fatal crashes and has yet to submit its software fix to get the planes flying again. The U.S. aviation regulator has also said some of the planes may have other faulty parts.

Last month TUI said it needed reassurances by the end of May that the MAX fleet could resume flying by mid-July or it would have to activate summer contingency plans that would cut underlying earnings before interest, tax and amortisation (EBITA) by up to 26% this year.

The one-off impact would amount to 300 million euros ($336 million), the company had said.

“As May has passed by, TUI Group is still not aware of a definite flight resumption date for the 737 MAX,” a TUI spokesman said, adding that the contingency plans had been triggered.

As June arrived without clarity on when the Boeing jets would return to service, shares in TUI slid by as much as 5.2% to a two-month low of 692p.

By 1450 GMT the shares had clawed back some of the losses to stand 4.1% down at 700p.

“This has been said before, but for some reason it is being viewed negatively,” one trader said.

Reporting by Alistair Smout; Additional reporting by Christina Amann in Berlin; Editing by David Goodman

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