At first glance, the new rescue program for the travel company Tui looks like a solid compromise: money from the state, but also from private investors, new loans from the banks and some say for the new donors. Everyone is doing a little bit, everyone is putting back a little bit – and ultimately everyone will benefit when the pandemic is over. Really?
The euphoria of the group, and incidentally also of the Federal Ministry of Economics, should not hide the fact that everyone involved is taking a considerable risk – especially the state. Even if a different impression is now given: Tui’s problems go further than the crisis, which is entirely externally indebted, and they will not be eliminated immediately with a large amount of money or a vaccine. The risks that the company, and thus the financial backers, must continue to face can already be seen when looking back.
There were already two profit warnings in 2019, including anger over Brexit and Boeing 737 Max for unrest. Although the group had the best booking figures in its history in the months before the outbreak of the corona pandemic, the bankruptcy of one of its largest competitors, Thomas Cook, may have contributed to this.
Many customers are in a bad mood for their previous favorite provider
The crisis management since the beginning of the pandemic has been extremely unfortunate on many fronts: The group has lost it with the stationary sales department due to poor accessibility and anger about commission repayments. So far, 75 percent of all trips have been sold there, and some business partners are thinking of parting with Tui as their main partner. There were also problems with the service providers. At the beginning of the year, hoteliers in Thailand complained about non-payments, and recently complaints came from Turkey, Greece and Spain.
Not least in Germany there are many customers who are bad at their previous favorite provider: Because they are waiting for their money for unusual trips, because – as a court ruling confirmed this week – they were led to believe that they would only rebook or get a voucher to be able to take but not receive any refunds. Sustainable business relationships with customers and partners look different.
TUI’s current business planning also raises questions. An example: According to the company, the booking numbers for 2021 are close to what was received for 2020 before the pandemic. How high the share of rebooking is due to canceled trips, for which no new money will flow, is discreetly concealed. Boss Fritz Joussen himself describes 2021 as a transition year in which restrictions are to be expected. Even in the comparatively uneventful year 2018, the consolidated profit was only 819 million euros. It remains unclear what billions of loans will be repaid in a few years – even if as many people were to travel with Tui in 2022 as before the pandemic.
And even this normalization is not certain. Many questions about the future of travel are unanswered: The hope for a vaccine has made many tourism experts optimistic and driven the Tui share price up. But even if it is possible to have vaccinated risk groups in western countries by the summer of 2021, this does not apply to all Germans who love to travel. It is also completely unclear when in the destination countries travel will be safe for both the population and visitors. Especially since the mere option of vaccination does not mean that people dare to sit together on buses, trains and Boeings again.
The fact that some Germans have now discovered how attractive camping in Germany or a trip to neighboring countries can be does not improve the prospects. How sustainable this business model, which also relies on fast airplane escapism to the south and cruises, is at least questionable in times of the approaching climate crisis.
The most meaningful thing about the multi-page message from TUI on the aid package is therefore probably the last sentence: “We are still working on different demand scenarios for the coming seasons.” Hopefully the taxpayer will see that the more optimistic of these scenarios will come true.
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