Tui results: Group posts €1.45bn loss for its April-June third quarter but chief e Continued from page 40 Leading industry lawyer


Stephen Mason, senior counsel at Travlaw, said the 2018 PTRs leave space for legal interpretation of the right to a refund when a holiday is cancelled. Mason said: “Is there


something different about multi- contract packages? Before the 2018 regulations, the consumer would just have a contract with the airline and a contract with the hotel and there would be no package. The 2018 PTRs superimposed on that the responsibility of a travel organiser. “I don’t know that it does


make a difference – the idea of the PTRs was to create a level playing field between tour operators and OTAs.” The PTRs make no reference


to Foreign Office advice, but give consumers the right to cancel with a full refund in the event of “unavoidable and extraordinary circumstances at the place of destination or its immediate vicinity . . . which significantly affect the performance of the package or the carriage of passengers to the destination”. Mason said: “What is meant


by ‘performance of the package’? Does it mean ‘is the hotel open?’ or does it mean ‘is the holiday experience seriously affected?’” He added: “There is also


the duty of care, which is significant.” Travel organisers’ duty of care to clients comes from case law, not from the PTRs. Mason pointed out: “The


courts are naturally on the side of consumers. A travel company needs a watertight case that the money is not refundable. The question of whether the airline cancels and refunds is irrelevant if performance of the package is found to be affected.”


Group enhances credit facility with €1.2bn state deal


Tui announced an agreement with the German government for an additional €1.2 billion credit facility ahead of last week’s third-quarter results. This followed an earlier deal in


April when Germany’s state-owned development bank KfW agreed to provide €1.8 billion in credit. Joussen explained: “We made


clear at the first [credit] application 38 20 AUGUST 2020


Tui chief hails integrated model for aiding restart


Fritz Joussen believes Tui’s successful restart of operations shows the advantage of an integrated travel business. Tui resumed taking customers


on holiday from Germany in June and the UK in July. Speaking on a third-quarter results call last week, the Tui chief executive said: “We started in June with 61 flights. In July we had 2,300. In August, we will operate 4,200 flights. We assume we’ll operate 30% of our summer programme.” The company reported carrying


563,000 passengers in July and also resumed cruise operations, operating short North Sea cruises from Germany with capacity limited to 60% and no disembarkation. Joussen insisted: “The integrated


business model allowed us to restart first. It shows we can make integrated decisions from marketing through to delivery.” He argued Tui had been able


to react quickly to changing travel restrictions and foreign office advice, such as the UK’s advice against travel to Spain, saying: “If you are


independent in the value chain, it is much more difficult to handle these changes. The integrated model is the best. We can say [to customers], ‘if you want to go to Greece, you can go’.” Joussen said: “Turkey opened


from Germany just a week ago. No one knows when Egypt will open. Changes will be part of our business, [but] this is not problematic for our business. It may be problematic for customers. It is not very customer-friendly, but it is not problematic for our business.” He acknowledged: “A total


lockdown would be problematic.” But he added: “The integrated model also allows us to drive through our digital- first strategy much faster. We do what we wanted to do anyhow, but faster.” Asked if the group could be forced


Tui expects to operate 30% of its summer programme


that the money would last to the end of May. We thought we were in a much worse position. It still might be enough. “But there is still volatility, so we


are happy we agreed new financial headroom with the German federal government. The risk of a second wave [of Covid-19] is also why we need the secondary cash.” Tui reported a monthly cash-


burn rate of €550 million-€650 million in the three months to June including refunds and revealed €350 million was paid out to customers in June. Joussen said: “More than 95% is paid back now.” He added:


to sell parts of its business, Joussen insisted: “There will be no forced divestments. When we do something we do it for strategic reasons.” He said: “Our cash facilities in place now total €2.4 billion.”


Tui has secured additional state credit


“Sometimes it’s not so easy [to pay a refund]. If you [a customer] paid via a travel agent, we need to know how you paid.”


travelweekly.co.uk


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