p18 pink nov21 18/11/08 18:16 Page 18
City & finance
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Tui profits slump
EasyJet founder
as demand falters
disputes figures
EASYJET founder Stelios Haji-Ioannou refused to
sign off the budget airline’s accounts this week
Tricia Holly-Davis.
Choice Holidays plc. However, while the tourism after it reported a 35% drop in pre-tax profits
TUI AG profits have plummeted for the first division, which includes Tui Travel, recorded to £123m.
nine months of the year to ¤45m, down ¤383m sound performance, earnings in the third quarter He claimed the airline had made “optimistic”
year-on-year. fell by ¤22m year-on-year to ¤616m, due in part to assumptions about future revenue from Gatwick
Tui Travel’s parent German company, which the pound’s weaker exchange rate with the euro. slots it inherited from GB Airways, claiming
which incorporates tourism and shipping Tui Hotels and Resorts recorded a third- its accounting policies were “at odds with
divisions, saw profits for the third quarter, to the quarter turnover of ¤143m, up 13% year-on-year. commercial realities”.
end of September, decline 3% to ¤448m. Turnover in the company’s cruises sector The escalation over the row between Stelios,
The company blamed the poor results on a totalled ¤51m in the third quarter, down 2% who owns nearly a third of easyJet’s shares, and
deterioration in the global economy, adding against last year. the board raised speculation he might reinstate
that booking levels over the past few weeks Overall, Tui Group’s turnover grew by 15% to himself as chairman.
suggested weakening demand. ¤8.5bn for the third quarter and 19% to ¤19.9bn EasyJet’s total revenue for the year to the
Despite the gloomy outlook for 2009, Tui said for the first three quarters combined. end of September was up 31.5% to £2.4bn,
it completed the 2008 summer season with good Capacity cuts have helped to improve margins, passenger numbers up 17.3% to 43.7 million and
results. It reported a 17% rise in turnover for its with turnover in Tui Travel’s mainstream load factor up 0.4 percentage points to 84.1%.
core tourism business in the third quarter to business up 2% and volumes down by 6% However, fuel costs rose 66.6% to £708.7m, up
¤6.8bn and a 24% rise for the first nine months against an 8% decline in capacity year-on-year. 42.6% from 2007.
of 2008 to ¤15bn. As a result, average prices are up 10%. Sales Chief executive Andy Harrison said winter
The growth reflected the consolidation of First for the UK, its biggest market, were up 7%. bookings for the first quarter of 2009 were
slightly ahead of last year, as passengers look for
In deep water? Tui reins back spending as downturn takes hold
cheaper options.
“EasyJet is well placed to emerge as a winner,
Tui Group will curb spending as it takes a German company owns 51% of its UK division. due to our cost base, strong balance sheet, new
wait-and-see approach to further acquisitions The news comes on the heels of the recent fuel efficient fleet and the quality of the easyJet
due to the current financial crisis. announcement by Travelzest that merger talks network,” he said.
Tui intends to suspend acquisitions previously had been called off in the face of the weak “We now have a leading position at Gatwick
under consideration, including any for the economy. and the 31% growth in seat capacity in mainland
remaining shares of Tui Travel. Travelzest had been informed by its potential Europe has strengthened our position in France,
Industry observers in October had predicted suitor, thought to be Tui, that “as a consequence Italy and Spain.”
Tui AG could use the proceeds from the ¤4.45bn of the current uncertainties in the financial Haji-Ioannou said the air-
sale of its container shipping unit Hapag-Lloyd markets, they have decided not to make an offer line should concentrate
to finance the purchase of Tui Travel. The for the company”. on cashflow rather
than carrying more
Analysts had predicted Tui would use proceeds from the Hapag-Lloyd sale to buy more shares in Tui Travel passengers.
He repeated his
calls for the company
to pay a dividend by
2011 and for two more
non-executive directors
to be appointed to the
board.
18 21.11.2008
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