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TUI annual earnings drop on 737 MAX grounding

Reuters
Updated

LONDON, Dec 11 (Reuters) - TUI Group's annual earnings fell 26%, in line with a previously downgraded outlook, as Europe's biggest holiday company paid the price for its Boeing 737 MAX planes being grounded.

The company, whose main rival Thomas Cook went out of business in September, said that it expected earnings to return to growth for the 2020 financial year, although it warned that the 737 MAX grounding would impact it by at least 130 million euros next year.

TUI posted annual core earnings (EBIT) of 893 million euros in the 12 months to Sept. 30, and guided that earnings next year would be in the range of 950 million euros to 1.05 billion euros.

The 737 MAX was grounded globally in March after two fatal crashes, dragging on TUI's performance due to the costs of securing replacement aircraft. The group also faced headwinds from overcapacity to Spanish destinations and Brexit uncertainty. (Reporting by Sarah Young; editing by Alistair Smout)