Package-holiday giant TUI plans 8,000 job cuts to adapt to shrunken travel market

A photo from March 16, 2020, shows a closed counter of the German travel company TUI at an airport in Hamburg. PHOTO: REUTERS

FRANKFURT (BLOOMBERG) - TUI said it could eliminate as many as 8,000 jobs to cut costs and slim down its business as people travel less and favor different locations following the coronavirus outbreak.

The world's biggest package-holiday company is seeking to pare costs by 30 per cent and offer more local breaks in the hope of encouraging a revival in tourism before the end of summer, it said in a statement on Wednesday (May 13).

Like other travel firms, Germany-based TUI was left reeling as the pandemic shut national borders and wiped out flights. While some countries are still largely in lockdown, chief executive officer Fritz Joussen said there's an appetite for vacations this year and that Europe must open up.

"Summer holidays in Europe can now gradually be made possible again, responsibly and with clear rules," Joussen said. "People want to travel. The season starts later, but could last longer."

Joussen said TUI need to reinvent its portfolio to adapt to realities including changed travel seasons, with new destinations and more local offerings. The company's Chinese unit has already restarted with trips and flights within the country. The first German hotels are set to reopen in coming days, and European destinations are ready to welcome holidaymakers, he said,

TUI reported an underlying second-quarter loss before interest and tax, depreciation and amortization of 540 million euros (S$830.8 million), versus a loss of 106 million euros a year earlier.

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