Tui cuts profit guidance after £34.8m hit from Iran war disruption

Holiday giant Tui said the Iran war cost it around 40 million euros (£34.8 million) last month after it was forced to repatriate thousands of holidaymakers and staff.

Europe’s largest travel operator cut its profit forecast and suspended revenue guidance as a result, sending it shares lower.

The company is among travel firms to have been significantly disrupted by the conflict in the Middle East, which began at the end of February.

It is also among airline firms to face pressure from a surge in jet fuel prices after the conflict pushed up the price of oil.

On Wednesday, Tui told shareholders that it had to absorb 40 million euros worth of costs in March due to “repatriation efforts and related operational disruptions”.

Following the start of the war, Tui repatriated around 5,000 passengers from two cruise ships anchored in ports in Abu Dhabi.

The cruise ships remain at the ports and have their itineraries cancelled until mid-May due to the hostilities.

Another 5,000 European customers in the region were also repatriated back to their home countries, after destinations such as Cyprus, Turkey and Egypt were affected.

The company said it also repatriated a further 1,500 staff members.

“The ongoing conflict in the Middle East and the uncertainty surrounding its duration continue to limit near-term visibility and drive consumer caution,” Tui added.

The Frankfurt-listed company reduced its profit guidance as result.

It is on track to deliver a full-year operating profit of between 1.1 and 1.4 billion euros, down from previous targets of roughly between 1.5 and 1.6 billion euros.

Tui said the geopolitical backdrop as seen some of its customers shift demand from eastern Mediterranean destinations to more western holiday locations.

Customers have also show “increased caution and booking closer to departure dates” across its markets and airline, and hotels and resorts businesses.

Booked revenues for its markets and airline arm are down 7% for this summer compared to last year as a result, with hotel occupancy also down 7%.

The company added: “Despite the volatile geopolitical backdrop, Tui remains well positioned.

“The group’s strong financial position and robust balance sheet provide flexibility to navigate the current environment while executing its strategic transformation.”