Multinational travel and tourism company TUI (TUI.L) announced that it will be suspending all package holidays, cruises, and hotel operations due to the coronavirus pandemic.
It confirmed in a statement that it is also withdrawing the guidance it is giving to investors about how it sees its financial results for 2020 and that the Executive Board has “decided to apply for state aid guarantees to support the business until normal operations are resumed.”
“In this rapidly changing environment the safety and welfare of our guests and employees worldwide remains of paramount importance and thus TUI Group has decided, in line with government guidelines, to suspend the vast majority of all travel operations until further notice, including package travel, cruises and hotel operations,” it said in a statement.
“This temporary suspension is aimed at contributing to global governmental efforts to mitigate the effects of the spread of the Covid-19.”
The group also highlighted how its Executive Board has decided to withdraw the Financial Year 2020 guidance, first communicated on 11 February 2020, and will “refrain” from issuing new guidance on how they think the company will do “under the current circumstances.”
“Due to the unprecedented escalation of Covid-19, the Board of TUI are continuously evaluating the situation and are considering a variety of actions to support our customers, colleagues and stakeholders,” it said.
The group confirmed that it currently has cash and available facilities of approx. €1.4bn (£1.26bn, $1.56bn) and year-to-date performance had been in-line with expectations prior to Covid-19.
“We are taking substantial cost measures to mitigate the earnings effect,” it said.
TUI shares are crashing in the market open, tumbling over 26% as of 8.42 am local time:
While every industry is going to feel the effect of the coronavirus impact, the travel industry are acutely at risk in the current climate.
The International Air Transport Association (IATA), an aviation industry trade group, said that airlines could lose between $63bn (£50bn) and $113bn in revenues as a result of the coronavirus outbreak.
The prediction represented a sharp jump from last month, when it estimated that the industry would only lose $29bn.
So far, the coronavirus pandemic pushed airline Flybe into collapse, risking 2,000 jobs while Norwegian airlines (NAS.OL) up to half its workforce could face “temporary layoffs” as it cancelled more flights over the coronavirus pandemic.
On 15 March, the union of aviation workers GMB called for the UK government help “iron guarantee” jobs for airline workers amid the downturn and also provide state aid, if the situation continues get worse.