Continued from page 40 Ryanair said it would carry


as few as 500,000 passengers a month in February and March. Eurocontrol reported


Europe’s air traffic is “on course” with a scenario it forecast in November, with traffic likely to recover to just over half (51%) of the 2019 level this year. It noted traffic last year was 44% of 2019 levels and warned: “Traffic in 2021 might be only marginally better than if no progress on vaccines had been made.” The forecast assumes vacci-


nations are “widely available” by summer 2022, but Eurocontrol concluded: “The availability of vaccines makes a negligible difference to flight numbers in 2021 versus the worst case of no vaccines being rolled out.” Eurocontrol produced


the forecast as one of three scenarios. The most optimistic was of a recovery to 2019 traffic levels by 2024, with vaccines “widely available” this summer and traffic at 73% of 2019 levels. However, Eurocontrol describes this as “less realistic”. It said the forecast “factors in


progressive vaccine deployment across Europe” this year, but not “full [vaccine] coverage” or the “disappearance” of Covid-19. Eurocontrol pointed out:


“Vaccines are here but will take considerable time to roll out.” The organisation warned


of “substantial failures in 2021” and called for “substantial support to the entire industry”. Latest Iata figures confirmed


passenger demand remains way below current airline capacity despite carriers slashing schedules. Iata reported an average load factor on international flights of just 41.5% in November despite a capacity reduction of more than 77%.


Joussen: No reason to think travel will be less important


The Tui Group is “fundamentally sound” and will resume “profitable operations” as soon as travel restrictions are lifted, chief executive Fritz Joussen assured shareholders last week. He told an extraordinary general


meeting: “Tourism remains a growth sector. There is no reason


38 14 JANUARY 2021 Fritz Joussen


to assume travel will become less important after the pandemic.” Joussen argued: “Before the


pandemic, we had 27 million customers and the strongest growth. Tui’s integrated business model is fundamentally sound and able to resume profitable operations.” He added: “We used these


months to strengthen our positioning. We reduced our overhead costs by 30%. We raised our annual cash reduction target from €300 million to €400 million. “Thanks to our integrated model we were able to provide holidays


Tui confident $1.8bn aid deal will be last it needs


Ian Taylor


Tui is unlikely to need further government support after securing a third financial aid package, of €1.8 billion, in Germany, chief executive Fritz Joussen has said. Yet the group will continue


to haemorrhage €250 million to €300 million a month, excluding working capital, through to March. Tui reported a monthly outflow of


up to €450 million in the final quarter of 2020, including up to €200 million a month in working capital. Joussen told an extraordinary general meeting on January 5 that


working capital “will depend on travel restrictions”. He said: “We don’t expect to


require any further government support from the KfW [German state development bank] or WSF [German economic support fund].” The €1.8 billion package,


announced on December 2 and agreed by shareholders last week, was the third tranche of aid agreed with the KfW and WSF, totalling €4.8 billion. Joussen reported Tui has


€2.8 billion in cash and equivalents to carry it through the crisis and said: “The net cash development depends on booking behaviour and advance


payments for summer 2021.” He argued: “We will reach


the business volume of 2019 no later than 2023. The return to a solid balance sheet will depend on liquidity management, sales and revenue, and optimisation of financing.” Liquidity management could include “the disposal of assets”, he said, but gave no details. Joussen reported Tui requested


a third financial package as long ago as October 15, saying: “A key reason was the increase of the pandemic and the repeated travel warnings.” He noted: “The state gives funds but not for free. Before coronavirus we were able to fund ourselves much more cheaply.” Asked about the conditions


attached to the credit and loans, he said the WSF would have two representatives on the group’s supervisory board and Tui “must use the funds cautiously”. He added: “Tui has reporting obligations to the WSF, which has the right to acquire up to 25% plus one share in Tui.” This would allow the WSF to veto any takeover.


right at the opening of borders [in the summer]. [But] from the end of August, freedom of travel was restricted. Then in November there was another lockdown.” He told shareholders the


aid package, comprising a near €1.1 billion loan, €200 million credit facility and capital increase of €500 million, “was the only feasible financing option”. Joussen confirmed Tui’s largest


shareholder Unifirm, owned by Russian investor Alexey Mordashov, will increase its stake from 25% to 36% through a shares acquisition.


travelweekly.co.uk


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