TUI is poised for significant growth in the UK market, but delays in Boeing aircraft deliveries have placed constraints on this potential.
Despite these challenges, TUI has leveraged partnerships and dynamic packaging to maintain strong sales and profitability.
TUI had planned to receive seven new Boeing 737 MAX aircraft for the summer season and 24 more in the next financial year. However, deliveries were significantly delayed due to a cabin-door plug issue that occurred mid-flight in January.
This setback has forced TUI to lease aircrafts to meet its operational needs, a move that has proven costly but necessary to minimise disruptions.
The delayed Boeing deliveries have not halted TUI’s progress. The company has forged new direct connections with easyJet, Ryanair, and other carriers, enabling it to increase sales of dynamic packages.
According to CEO Sebastian Ebel, ‘Further growth is on the dynamic package level.’ This shift has allowed TUI to attract more customers despite fleet limitations.
TUI reported record revenue of €5.8 billion for the third quarter ending in June, marking a 9% increase from the previous year. Group bookings for the summer were also up 6% year-on-year, with the average sales price increasing by 3%.
Departing passenger numbers rose to 5.8 million, a 4% increase from last year, while dynamic passenger numbers grew by 8% to 800,000.
Ebel emphasised the resilience of TUI’s business model, noting that late bookings for August and September were particularly strong.
While TUI anticipates Boeing deliveries to normalise by 2026, the company is optimistic about its growth prospects in the UK market. Leased aircraft have mitigated immediate disruptions, allowing TUI to continue operations.
‘We expect the deliveries in 2026 and we will manage the situation until then,’ Ebel stated.
TUI’s strategic shift towards dynamic packaging and alliances with other carriers have been crucial in maintaining its market position. The company reported an underlying operating profit in double digits for the eighth consecutive quarter.
Operating profit for the three months ending in June was €226 million, and the nine-month operating profit stood at €31 million, highlighting the effectiveness of TUI’s adaptive strategies.
UK summer bookings increased by 5% compared to 2023, with German bookings also up by 10%. Although specific average sales prices were not disclosed, the robust performance indicates strong market demand.
Ebel noted that the UK winter programme is already 32% booked, with short-term bookings for August and September showing remarkable strength.
Despite the constraints posed by delayed Boeing deliveries, TUI remains focused on leveraging its strategic partnerships and dynamic offerings to drive growth. The company opened a direct link for Ryanair sales in Central Europe, tapping into a profitable late-booking market.
As TUI navigates through these operational hurdles, its commitment to growth and adaptability will be crucial to its long-term success.
TUI’s ability to adapt and leverage partnerships has allowed it to navigate the challenges posed by delayed Boeing deliveries.
The company’s proactive strategies and dynamic sales growth underscore its resilience and potential for future expansion in the UK market.
