Tui has reported a surge in late summer holiday bookings.
After a quieter summer due to travel restrictions, the group announced plans to raise 1.1 billion euros to reduce its debt.
TUI’s chief executive, Fritz Joussen, said: “The capital increase will enable us to take a significant step closer to our goal of rapidly repaying the government loans.”
Tui has been bailed out several times by the German government since the start of the pandemic.
Whilst summer holiday bookings are normally around nine million, this year bookings hit around five million. This was driven by late summer holiday bookings primarily by German and Dutch customers.
AJ Bell investment director, Russ Mould, commented: “Travel operator TUI is back to the market with its begging bowl out again. Not for the first time in this crisis the slow return to normality for tourism is causing problems, putting more strain on its balance sheet than an elephant on a tricycle.
“The assumption through the pandemic has been that TUI would never go to the wall, despite a very messy balance sheet, because the German authorities would always step in to bail it out.”
“However, the state-backed loans it received weren’t handouts, they do need to be paid back hence the need to go out and raise more funds through a rights issue.”