Tui repatriated almost 12,000 holidaymakers and staff due to the conflict, according to the company. The effort included returning 5,000 guests from two cruise ships anchored in ports in Abu Dhabi and Doha, and a further 5,000 European holidaymakers from destinations in the region. Tui also returned 1,500 crew members from the ships. The company has not specified how long the cruise ship itineraries in Abu Dhabi and Doha are cancelled for, nor provided an exact breakdown of the €40 million cost between repatriation, lost revenue, and other expenses.
Tui's operations in Turkey, Cyprus, and Egypt were particularly badly affected. The geopolitical situation has led to increased jet fuel prices, a shift in customer demand towards Western Mediterranean destinations, and more last-minute bookings, impacting summer revenues and hotel occupancy. Tui has seen a partial shift in customer demand from the eastern Mediterranean to destinations in the western Mediterranean. Demand was increasing for holidays in Spain, Portugal, Greece, and Cape Verde this summer as customers opted for familiar, easy-to-reach locations, according to Tui.
Booking revenue and hotel occupancy were down 7% year on year this summer, Tui reported. The ongoing conflict in the Middle East and the uncertainty surrounding its duration continue to limit near-term visibility and drive consumer caution, the company added. Tui is reducing its profit forecast for this financial year from €1.41 billion to between €1.1 billion and €1.4 billion. Tui's shares fell as a result of cutting its full-year profit forecast, according to reports.
Tui's guidance on profits assumes no material escalation in geopolitical tensions and that fuel supplies can be maintained, according to the company. Tui has hedged 83% of its summer jet fuel requirements against the rocketing price of oil, and 62% of its winter season. It is unclear what specific measures Tui is taking to mitigate further financial losses from the conflict.
Rising air fares as a result of an increase in fuel prices because of the war were a factor in a 4.7% increase in overall transport prices in the year to March, the fastest annual rate since December 2022, according to the UK's Office for National Statistics. Airlines lobbied the UK government to relax environmental and noise rules, as well as modify passenger rights and cut taxes on flying, as they prepare for higher costs and a possible shortage of jet fuel because of the conflict in the Middle East. How the UK government will respond to airline lobbying regarding environmental rules and taxes remains unknown.
Lufthansa has already moved to cancel 20,000 flights between May and October to save fuel, the airline said. Lufthansa cut about 120 daily flights from Monday and would drop unprofitable routes from Munich and Frankfurt until the end of the summer season, which runs to mid-October. Whether other major travel companies are experiencing similar financial impacts from the conflict is not specified.
The ships have since been able to leave the Gulf and will commence their summer season itineraries in the Mediterranean from the middle of next month, according to Tui.