TUI results take flight despite Boeing 737 MAX grounding

13 August 2019, 08:04 | Updated: 13 August 2019, 11:40

Tour operator TUI has reported strong growth in revenues despite the grounding of its Boeing 737 MAX jets.

It follows the global suspension of Boeing's flagship aircraft after two fatal crashes forced airlines to rely on older and less-efficient planes as replacements.

The pan-European travel company, which has a fleet of 15 jets that remain grounded, said it anticipated a total €300m (£279m) charge for the year over the issue.

Boeing said it assumed the 737 MAX would return to service in the US and other countries in the autumn but could not give an exact date.

TUI said while replacing the grounded jets in the busy summer period was costly, it expected the situation to become more manageable during the winter lows.

Shares in TUI rose by more than 3% as the company stuck to its previous guidance but remained down by 45% over the past year.

The Germany-based firm said earnings declined by 46% year-on-year to €100.9m (£93.6m).

Chief executive Fritz Joussen cited efficiency drives and cost reductions, but noted uncertainty around Brexit, aviation overcapacity to Spain and delayed bookings in the summer.

Mr Joussen also said a fall in sterling since Boris Johnson became UK's prime minister discouraged British customers from travelling abroad.

In stark contrast to its UK-based rival Thomas Cook, which faces a risk of bankruptcy, the world's largest holiday company said it was in a "robust financial position".