Grounding of Boeing 737 Max weighs on German travel firm TUI's Q3 profits
The worldwide grounding of Boeing's 737 MAX 8 aircrafts had weighed heavy on TUI's operational profits in the third quarter of fiscal year 2019 (Q3), the German tourism giant revealed on Tuesday.
"Despite the challenging environment in 2019 to date, our underlying business remains robust," said TUI CEO Fritz Joussen in a statement.
Adjusted earnings before interest, taxes and amortization (EBITA) declined by 46 percent to 100.9 million euros (113.2 million U.S. dollars), TUI announced.
The decline was "in particular due to the impact of 144 million euros as a result of the grounding of the 737 Max", according to Europe's largest tourism company.
Following two airplane crashes within months in Indonesia and Ethiopia caused by software problems of the 737 Max 8's emergency system leaving 346 people killed, all aircraft of this type were banned from flying by countries around the world.
As a consequence of the grounding, TUI had "launched a number of measures" such as providing replacement aircrafts "until the end of the summer season", it said.
In total, TUI is anticipating expenditures linked to the 737 Max 8 grounding to amount to around 300 million euros for the full fiscal year 2019.
TUI's Q3 business had been burdened further by "delayed customer bookings driven by the summer 2018 heatwave, the continued Brexit uncertainty and considerable aviation overcapacity to Spanish destinations continued in the third quarter".
According to TUI, its turnover had increased by 3.7 percent to 4.8 billion euros in the quarter between April and June.
TUI had already cut its business outlook for the fiscal year 2019 back in March after the first groundings of the Boeing 737 Max 8 aircraft and the provision of "additional flight capacities".