LONDON (Aug 12): TUI, Europe's largest travel company, missed third-quarter operating profit forecasts on Wednesday, as bookings fell and jet fuel prices remained high due to the Iran war.
Germany's TUI, which runs cruise ships, airlines and hotels, said it faced the additional challenge of increased capacity amid low demand as it received new deliveries of cruise ships, but did not adjust its outlook.
TUI's shares fell by more than 1% following the results, which reaffirm warnings by Europe's airlines and travel companies that tourists are hesitating over holidays given the ongoing uncertainty tied to the Iran war.
"2026 is no ordinary year. TUI has held its own well in a difficult global environment. Our business model is proving to be resilient. Travel remains highly relevant to people's lives, but the timing of travel decisions has shifted," TUI CEO Sebastian Ebel said in a statement.
Major airlines including IAG, Lufthansa and Air France-KLM said they were either cutting capacity or keeping it flat for the year ahead, in an effort to mitigate a broader fallout on their bottom line.
'Able to fly all of our aircraft'
Ebel told journalists that TUI had cut its airline risk capacity by 5%, which signifies pre-booked guaranteed seats, in an effort to mitigate damage from unsteady demand and be able to fill space based on immediate need.
"We were able to fly all of our aircraft. I think we even had one aircraft more in the UK than the year before," he said.
TUI reported an operating profit of €234.6 million (US$270.6 million), down almost 27% from last year and lower than the €274 million projected by analysts polled by LSEG.
It confirmed its adjusted operating profit outlook of €1.1 billion to €1.4 billion for the 2026 financial year.
TUI cut its profit forecast and suspended its revenue guidance in March due to spiralling jet fuel costs and the uncertainty surrounding the Iran war.
Ebel said TUI was still seeing a reduction in bookings to the eastern Mediterranean and that central European tourists in particular were booking fewer trips to the United States.
TUI's shares are down more than 12% since the Iran war began on Feb 28 with US and Israeli strikes.
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