Closure of Europe’s airspace due to volcanic ash cloud
As a result of the volcanic eruption in Iceland, large parts of Europe’s airspace were closed from 15 to 21 April 2010 due to the volcanic ash cloud. The associated flight disruptions had an adverse impact on the scheduled implementation of the TUI Group’s tourism business. In total, over 180,000 TUI customers in resorts were affected. TUI organised holiday extensions or alternative return options from the holiday regions for these customers. In addition, more than 175,000 TUI trips had to be cancelled; these customers were offered rebooking their holidays free of charge. The cumulative cost resulting from the airspace closure for the TUI Group’s earnings totalled €128m. The largest portion of €123m related to the activities of the TUI Travel Group, while €3m related to TUI Hotels & Resorts and €1m to Hapag-Lloyd Kreuzfahrten.
As the earnings effects associated with the airspace closure were one-off in nature, they were carried as an adjustment item in the interim financial statements for the third quarter of 2009/10.
TUI Travel PLC issues convertible bond
On 27 April 2010, TUI Travel PLC issued £400m of convertible bonds. TUI AG acquired 50% of these convertible bonds. The acquisition has been fully refinanced via a three-year financing arrangement with Deutsche Bank. A mechanism has been put in place to always secure TUI’s voting rights majority in TUI Travel in the event of any third party conversions.
TUI Cruises announces expansion
On 27 May 2010, TUI Cruises GmbH announced an expansion of its fleet. Following the successful establishment of Mein Schiff, the company will thus further expand its market position in the volume cruise segment. The second liner will be commissioned in May 2011. A cruise ship built in 1997 and currently sailing for Celebrity Cruises will be extensively converted and redesigned. The aim is to follow the successfully implemented premium concept in modernising the cabins and the catering and wellness facilities of Mein Schiff 2.