TUI AG has received the approval of the German government for a bridging loan of €1.8 billion from the KfW. The funds from Germany’s state-owned development bank are to be used to increase TUI’s existing credit line with its banks amounting to €1.75 billion (Revolving Credit Facility).
The KfW bridging loan is subject to the approval of the banks. Talks on this have already started and will be continued. One of the conditions of the KfW bridging loan is that TUI waives dividend payments for the duration of the bridge loan. This would give TUI access to financial resources and credit lines totaling €3.1 billion at the present time. TUI had decided to apply for the KfW bridging loan to cushion the unprecedented effects of the COVID-19 pandemic until normal business operations could be resumed. Following travel restrictions and travel warnings from almost all countries, the Group had to suspend its touristic offers in mid-March, including packaged tours, cruises, and hotel operations, until further notice.
In the past financial year 2019, TUI Group generated a turnover of around €19 billion and operating results of €893 million, including the costs of almost €300 million for the flight ban on the Boeing 737 MAX. Excluding the costs from the flight ban, operating results were at the level of the record year 2018 (€1.2 billion). At the beginning of February 2020, bookings for the current summer were 14% higher than the previous year. January 2020 was the strongest booking month in the company’s history. (€1.00 = US$1.10 at time of publication.)
