Tui suspends ‘the vast majority’ of operations

Ian Taylor

Tui announced the suspension of the “vast majority” of its operations due to Covid-19 on Sunday. However, Tui UK continued to

operate to a handful of destinations at the start of this week before the Foreign Office advised against all travel on Tuesday. Europe’s largest travel group also

announced it was applying for state aid guarantees and withdrew its profit guidance for the year. In a statement, the company

said: “Tui Group has decided, in line with government guidelines, to suspend the vast majority of all travel operations until further notice, including package travel, cruises and hotel operations.” A Tui spokesman explained:

“We are still operating in the sense we are bringing back customers, which is a huge operation, and bringing back cruise customers,


Total in cash and credit facilities available to Tui

for example from the Caribbean.” He added: “When we made the

announcement, Tui Germany and Tui UK could still operate to Egypt, Cape Verde and Mexico. Then Germany recommended against travel abroad, so Tui Germany has ceased all operations. The UK was ‘last man standing’ to destinations which remained open.” The Tui statement made clear:

“The group has cash and available facilities of approximately €1.4 billion.” It added: “We are taking

substantial cost measures [and] have decided to apply for state aid guarantees to support the business until normal operations are resumed.” The spokesman confirmed: “We

are stopping all investment, suspending large-scale projects, cutting external

Tui Group

chief executive Fritz Joussen

consultants and all unnecessary spending and discussing reducing staff hours country by country. “We are talking with the German

government [about state aid]. We have a credit facility of €1.4 billion, but it’s not easy to anticipate how long this will take. To ensure we have the facilities to go through a longer time, we are also seeking state aid. The German government has said, ‘No company should go bust because of this situation’.”

BA signals job cuts to ensure carrier’s ‘survival’

British Airways chief executive Alex Cruz has warned staff the airline is “under immense pressure” and is poised to cut jobs. Cruz issued a video message to

staff on Friday warning the airline industry faces a “crisis of global pro- portions like no other we’ve known”. The carrier would be forced to

lay off staff, suspend routes and ground aircraft, Cruz said, adding: “We will have to react fast. We are suspending routes and will be parking aircraft in a way we have never had to do before.” He warned of job cuts “perhaps

for a short period, perhaps longer term” in the message headlined “The survival of British Airways”. BA declined to comment on the

extent of lay-offs.

BA is grounding aircraft


The Covid-19 public health emergency poses unprecedented challenges. The pace of events makes almost any declaration of policy irrelevant within hours. The prime minister’s statement

on March 12 included two key points on the likely duration of the crisis: “The most dangerous period is some weeks away [and] we can act to stretch the peak over a longer period.” Chief scientific advisor

Sir Patrick Valance noted of Britain: “We are about four weeks behind Italy and other countries in Europe. We can’t stop everybody getting it [the virus].” Any business leader hoping for an early resolution had better think again. This crisis will extend into May and probably June at least. However, the experience

of China, now in its fourth month of crisis, shows improvement will come. It spent December in denial before taking increasingly

serious steps to control the epidemic. By the end of February, the authorities appeared to be gaining control. For now, businesses need to

demonstrate the utmost flexibility, not just towards customers but towards each other. Agents and tour operators could do with a lot more assistance and information from airlines for a start. Businesses need to survive and

therefore to conserve cash. A recession appears inevitable, as do business failures. The government and Bank of England announced a

raft of measures to help business – especially smaller businesses – last week. However, the government should suspend all demands for cash and free up lending across the board. We would all do well to speculate

less and prepare more based on information from official sources. This will be over in a few months. Demand will return. We need to aid those at risk and do what is necessary to be around for the upturn.

Ian Taylor, executive editor 19 MARCH 2020 47

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