global tourism

TUI, German gov’t agree on new 1.2-billion-euro aid package

Agence France-Presse, Agence France-Presse
TUI, German gov’t agree on new 1.2-billion-euro aid package

Photo from TUI website

The new funds add to the 1.8-billion-euro government loan that tourism giant TUI agreed to in April 2020

Tourism giant TUI and the German government agreed on Wednesday, August 12, to a second massive aid package, in a sign of how the effects of the coronavirus pandemic are still battering the industry.

The Hanover-based company agreed to a 1.2-billion-euro ($1.4-billion) package with German public lender KfW, intended to bolster the firm through its winter 2020-2021 season.  

The new funds add to the 1.8-billion-euro government loan that the company agreed to in April.

The company previously announced that it would cut 8,000 jobs worldwide to reduce costs.

TUI’s hotels, flights, and cruise ships were empty at the height of worldwide lockdowns and have struggled to reopen as major destinations such as Spain have seen virus infections spike and been subjected to further quarantines.

The additional money means TUI would have credit lines of 2.4 billion euros, according to the company. The new funds comprise 1.05 billion euros in loans and 150 million euros in convertible bonds.

“The 1.2-billion-euro stabilization package strengthens TUI’s position and would provide sufficient liquidity in this volatile market environment,” TUI said in a statement. 

Chief executive officer Fritz Joussen said the group had already introduced “massive cost reductions in good time and implemented them quickly and consistently.”

“However, no one knows at present when a vaccine or medication will be available and what effects the pandemic will have in individual markets in the coming months,” Joussen added. 

“Therefore it is right and important to take further precautions together with the German government.” 

TUI announces its 3rd quarter results on Thursday, August 13. – Rappler.com