TUI has announced plans to increase its market share following the collapse of its rival Thomas Cook, travelmole.com reports.
In a trading update this morning, TUI announced it will become ‘more cost competitive’.
The company, which will report its full year results in a few weeks, noted it is currently assessing the short-term impact of Thomas Cook’s insolvency on the final week of its 2019 financial year.
Some TUI customers had been booked on Thomas Cook flights, meaning the operator will have to find replacement services, which could negatively impact its earnings for the whole year.
Nevertheless, chief executive Friedrich Joussen said: “Our vertically integrated business model proves to be resilient, even in this challenging market environment.
“Our Holiday Experiences business continues to deliver strong results. Meanwhile, our Markets & Airlines business faces a number of ongoing external challenges such as the grounding of the 737 MAX aircraft, airline overcapacities and continued Brexit uncertainty.
“The Summer 2019 season is however closing out in line with expectations and we therefore reiterate FY19 underlying EBITA guidance stated in our ad hoc announcement of March 2019 of approximately up to minus 26% compared with underlying EBITA rebased in FY18 of €1,177m.
“These external challenges will continue in FY20 – therefore, we will focus on becoming more cost competitive in our Markets & Airlines business to protect and extend our market share where possible.”
TUI’s share price, along with those of other travel companies, has been boosted by Thomas Cook’s bankruptcy.
TUI’s share price increased by almost 10% initially, and remained almost 8% up in early trading. Ryanair was up 3.9%, while British Airways-owner IAG rose 1.2% and easyJet was up almost 5%.
OTA On the Beach has warned of a one-off hit today from the Thomas Cook downfall.
“The group expects to be able to recover the costs of the cancelled flights via chargeback claim (as was the case for the Monarch failure in 2017),” the firm pointed out.
“This one-off exceptional will be booked in the current financial year.
“The Board is currently evaluating the potential effects of the failure on its forecasted performance for the year ending 30 September 2020, and a further update will be provided when appropriate.”
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