Tui hit by Middle East travel chaos and rising fuel costs

Tui, the world's largest travel and tourism firm, faced a decline in earnings from its airlines business due to the ongoing Iran war and rising fuel costs. The group reported a €17 million loss in its airlines segment in the six months leading up to June, a stark contrast to a €50 million profit in the same period last year. The group attributed the drop in performance to weaker demand caused by geopolitical factors and higher fuel prices, resulting in an eight percent decrease in airline revenue to €4.9 billion.

However, Tui's hotel, resort, and cruise businesses saw a revenue increase. The company's overall revenue fell by six percent to €5.8 billion, and its underlying profit dropped 27 percent year on year to €235 million, falling short of analyst projections of €274 million. Despite the challenges, Tui's CEO Sebastian Ebel claimed that the company has managed to "hold its own" in the difficult global environment.

He attributed the fluctuating consumer sentiment to various factors, including ongoing geopolitical tensions, economic weakness, and rising inflation in Europe's core markets. The company's "museums" arm, which offers tours and activities, showed a nine percent increase in underlying profit to €22.7 million. However, Tui's shares dropped by three percent, bringing the stock price to €7, marking a 21 percent decline since the beginning of the year.

Analysts from Hargreaves Lansdown warned that Tui investors may need a holiday after the company's poor results, as the weak quarter adds pressure for a clean landing in the final stretch of the year.