TUI, the world’s largest travel group, cut its profit outlook Wednesday and withdrew its revenue guidance as it warned of “consumer caution” driven by the Middle East war.
Core profit for the year should now either be stable or fall by up to 300 million euros ($352 million) from last year’s 1.4 billion euros, the company said, down from a previous forecast for growth of seven to 10 per cent.
TUI also withdrew its sales guidance for the year “until conditions stabilize”.
“The ongoing conflict in the Middle East and the uncertainty surrounding its duration continue to limit near-term visibility and drive consumer caution,” the Hanover-based company said.
Air travel and cruise lines have been hit hard by the conflict as operators face higher fuel prices and the costs of rerouting flights and ships as travel security risks rose.
German airline group Lufthansa last week partly blamed soaring jet fuel prices as it announced the closure of its CityLine subsidiary. TUI said the war had directly cost it about 40 million euros in the second quarter.
AFP
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