TUI reduces winter capacity, continues to evaluate funding options

FILE PHOTO: People stand outside the TUI travel center following the coronavirus disease (COVID-19) outbreak, in Hanley, Stoke-on-Trent, Britain, July 28, 2020. REUTERS/Carl Recine

LONDON (Reuters) - Holiday company TUI TUIGn.DE said that it had reduced capacity for the coming winter season due to changing travel restrictions, and it continued to evaluate options to boost its balance sheet which has been strained by the COVID-19 pandemic.

The Germany-based group which is the world’s largest travel company said on Tuesday its liquidity stood at 2 billion euros on Sept. 20, down from 2.4 billion euros in mid August, with the reduction due to higher customer refund obligations.

Travel restrictions have hit the company hard, forcing it to cancel trips and change its schedule, and rising coronavirus infections across Europe mean it has now reduced its already shrunken winter season by another 20%, it said.

That means less future business, heaping more pressure on the group’s finances.

“We continue to evaluate options to achieve the optimal balance sheet structure to support the business over the longer term,” TUI said in its statement.

Sources say that TUI is considering a share sale of up to 1 billion euros to prop up its balance sheet. A German government bailout of 3 billion euros in debt has helped it survive the crisis so far.

TUI stuck to guidance that for its summer season next year it will operate 80% of its adjusted capacity and said it was encouraged by early bookings.

Reporting by Sarah Young; editing by James Davey