Coronavirus causes huge losses for TUI
German multinational travel and tourism company TUI group reported huge losses on Thursday, impacted by travel restrictions imposed by countries across the world to slow the spread of coronavirus.
The group posted a €1.42 billion ($1.68 billion) loss between April and June, the company announced in Hannover. In the same period of the previous year, the group had posted a profit of €22.8 million.
Year-on-year, company's turnover collapsed by 98.5% to €71.8 million.
The travel and tourism sector has been one of the hardest hit by the coronavirus pandemic after flights were grounded and travel ground to a halt. Countries in Europe and elsewhere lifted some restrictions in time for summer.
Read more: A great getaway or a coronavirus cage? The difficult restart for sea cruises
The struggling travel group had already secured around €3 billion in government aid to help it survive its pandemic-induced financial problems.
The company on Wednesday announced it would get an extra €1.05 billion from the German Development Bank (KfW) on top of €1.8 billion secured in April.
It has also secured €150 million in convertible bonds from the federal government's coronavirus Economic Stabilisation Fund. These can be exchanged under certain conditions into shares.
This could allow the federal government, for example, to become a co-owner of Tui with up to 9% of shares.
In addition, TUI management has embarked on a program of cost cutting.
Read more: Traveling to Germany: Questions and answers
Signs of hope?
The company hopes an uptick in bookings in the current quarter that ends in September will stop the drain on its finances, said chief executive Fritz Joussen.
Since the resumption of travel, the company has taken 1.7 million bookings.
kmm/rt (AFP, Reuters, dpa)