Thousands of jobs at risk as travel firm Tui faces ‘greatest crisis’

Tui has said thousands of jobs would be cut worldwide (PA Images)
12:46pm, Wed 13 May 2020
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Holiday giant Tui is looking to cut up to 8,000 roles worldwide with the firm calling Covid-19 the “greatest crisis” the industry has faced.

The UK’s biggest tour operator posted losses of 845.8 million euro (£747m) in the first half of 2020, compared to 289.1 million (£255m) in the same period 12 months previously.

The Anglo-German company said: “We are targeting to permanently reduce our overhead cost base by 30% across the entire group.

“This will have an impact on potentially 8,000 roles globally that will either not be recruited or reduced.”

Fritz Joussen, chief executive of the firm, said the company should “emerge from the crisis stronger”.

He added: “It will be a different Tui and it will find a different market environment than before the pandemic.

“This will require cuts: in investments, in costs, in our size and our presence around the world.

“We must be leaner than before, more efficient, faster and more digital.”

The company’s report said: “The tourism industry has weathered a number of macroeconomic shocks throughout the most recent decades, however the Covid-19 pandemic is unquestionably the greatest crisis the industry and Tui has ever faced.”

It added that losses also came as a result of the grounding of the Boeing 737 Max aircraft after two crashes with other airlines.

I can only say we are ready to provide safe trips, not everywhere, but in some destinations that customers would like to go

Manuel Cortes, general secretary of union TSSA, said: “We are extremely disappointed that Tui is planning to cut 8,000 jobs around the globe and would urge them to think again.

“In Britain, the Government’s job protection scheme means that no jobs should be lost here. There is also a similar scheme in the Republic of Ireland. Therefore, there is simply no excuse for job cuts in Britain and Ireland.”

In a media conference call, Mr Joussen said the firm believes it can resume holidays in July at the latest.

Destinations such as the Spanish islands, Greece and Cyprus “are ready”, he insisted.

He said: “I think people have a strong demand to do these kinds of travels and I think we have the means to make it possible with reasonable safety.”

He said Tui has seen strong demand from UK holidaymakers bookings trips for this winter to destinations such as the Canary Islands and Egypt.

“The Canaries are very safe,” he added.

Mr Joussen revealed that around half of customers are demanding cash refunds for cancelled trips, while half are accepting vouchers.

He said: “I think we all need to strive that actually the system doesn’t collapse because that doesn’t help anybody – not the customer, not the countries, not the economy.

“(If the) system collapses, the demand comes back and suddenly you don’t have any offers anymore.”

Demand for cash refunds can be reduced by “many means”, he claimed, such as making the acceptance of vouchers mandatory, giving vouchers financial protection from governments and stating that “travel is possible soon”.

He expects Tui will issue payouts to customers of up to 200 million euros (£177 million).

Asked for his response to Health Secretary Matt Hancock’s comment on Tuesday that it is “unlikely that big, lavish international holidays are going to be possible for this summer”, Mr Joussen said: “What I see on a global basis is that customers want to go on their holidays, that politicians could more and more take the view that it is appropriate – particularly in Europe – the free movement is appropriate and adequate when it is safe, so there is no undue limitation of customer visits when you can provide safe trips.

“I can only say we are ready to provide safe trips, not everywhere, but in some destinations that customers would like to go.

“Increasingly, I get the feeling that politicians and governments are following a European open borders idea if it is adequate and reasonably safe.”

The UK has said it is preparing to introduce quarantine rules for passengers entering or returning to the country.

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