Tui takes €200m hit after Boeing 737 Max jets grounded following crash
Travel operator Tui has taken a €200m (£172.5m) hit from the grounding of Boeing’s 737 Max planes.
The holiday destination company confirmed the blow this morning, saying the expense of drafting in spare aircraft and “other disruption costs” will weigh on profits.
Underlying earnings before interest tax and amortisation are now expected to drop 17 per cent on last year’s €1.18bn as it rakes in just €977m for its 2019 financial year.
Boeing was forced to ground the jets after countries and airlines refused to fly the planes following two crashes, one last October and an Ethiopian Airlines disaster earlier this month.
TUI shares were down more than 10 per cent this morning.
TUI has about 150 planes, of which 15 are grounded 737 jets. A further eight are scheduled for delivery by the end of May 2019.
In a statement on its website, TUI said that following the grounding of the 737s it had "made arrangements" to guarantee that customers will still be able to go on holiday.
Spare aircraft is being used and leases have been extended for aircraft that was supposed to be replaced by the Boeing jets.
However, the group warned that there was "considerable uncertainty" as to when the 737 would come back into service.
Michael Hewson, chief analyst at CMC Markets, said: "It can only be a matter of time before travel operators and airlines start knocking on Boeing’s door for compensation as a result of lowered guidance and profit expectations, which has seen investors knock millions of pounds of their market valuations."