Tunisian terror attacks cost travel operator TUI £32m

LONDON-Travel operator TUI AG (TUI1.XE) has reported a rise in fiscal third-quarter profit even though the recent terror attacks in Tunisia shaved 10 million euros ($11.1 million) off earnings as tourists turned away from the popular North African vacation spot.

The group said, however, that the quarter was overshadowed by the terrorist attack in Tunisia, when a gunman opened fire on a beach in Sousse, killing 38 people.

TUI reports that it has had to cancel agreements with more than 25 hotels in Tunisia after the British Government advised all British visitors to leave the country. “I am immensely proud of the commitment and dedication that we as an organisation have collectively shown”.

Group underlying pre-tax earnings before interest and amortisation for the quarter increased to €194mln from €164mln a year ago, or to €185mln excluding the earlier timing of Easter and the positive impact of foreign exchange translation.

Tunisia has in the past represented 3 per cent of the company’s annual tour operator programmes.

TUI’s joint chief executives Friedrich Joussen and Peter Long said in a statement: “This quarter was marked by the tragic events in Tunisia at the end of June. To date, most customers who had booked holidays to Tunisia this summer have rebooked with us for alternative destinations”.

“We are able to accelerate our group’s growth through the successful integration and consistent implementation of our strategy”.

Shares in the world’s largest leisure tourism group, TUI, surged yesterday after it indicated it was on course to record strong earnings growth despite the Tunisian beach massacre. This demonstrates the resilience of our integrated business model.

We were 100% focused on making sure that our customers were looked after and that was our number one priority.

However, despite lower demand from Germany and Belgium, overall bookings to Greece are in fact up year-on-year.

TUI said that Greece’s flirtation with default and leaving the eurozone had also hit bookings, but Greek holiday sales had picked up in recent weeks.

But the travel operator still posted net income of €49.4million in the three months to the end of June, up from a loss of €5.6million in the same period in 2014.