Holiday giant Tui has revealed it slumped to a 3 billion euro (£2.7 billion) annual loss and is ramping up cost cutting as it warned bookings will not recover fully until 2022.
The group swung to the mammoth loss compared with underlying earnings of 893.5 million euros (£811.3 million) the previous year after revenues plunged 58% to 7.9 billion euros (£7.2 billion).
The holiday sector has been hammered by the pandemic as restrictions and lockdowns have decimated demand and seen international travel largely grind to a halt.
Tui – which last week secured a third government bailout in Germany – put faith in the rollout of Covid-19 vaccines to “significantly” boost holiday demand in 2021, but cautioned the market will not recover to pre-crisis levels until 2022.
It has hiked its cost-cutting target by another 100 million euros (£91 million) to 400 million euros (£363 million) as it revealed swingeing job cuts amid the crisis have reduced its workforce by 32% to 48,300.
But it said there were no further job losses expected on top of the 8,000 announced in May, which will also see 166 high street travel agencies shut across the UK.
Fritz Joussen, chief executive of Tui Group, said: “The rapid measures to cut costs and secure liquidity are important for the group – they are a stable foundation for the future.
“The prospect of successful vaccinations from the beginning of the year makes us confident.
“All indicators point to a successful restart of the travel business as soon as the pandemic is over. We are prepared for this new start.”
Tui agreed a further 1.8 billion euro (£1.6 billion) rescue package last week from the German government, as well as private investors and lenders to help the group through the second wave of the pandemic.
Tightening restrictions across the globe in response to rising Covid-19 cases have seen travel demand slump after a brief recovery in the summer, with holidaymakers booking at the very last minute.
Tui’s bookings have crashed 82% for the current winter season, but summer bookings for 2021 are 3% higher than summer 2019 with prices up 14% on 2020 levels.
Tui is hoping cruises in particular will bounce back as soon as vaccines become widely available.