Hanover/Hamburg, March 19, 2007

TUI AG, Europe's leading tourism and shipping company, closed fiscal year 2006 with a considerable increase of the underlying operating earnings in its tourism division. The tourism result improved by 9.5 per cent to 401 million euros (366 million euros in the previous year) after adjustment for special influences (underlying divisions EBITA). In the tourism division, the company posted about 14.1 billion euros in sales for 2006. This figure matches the previous year's level. The shipping division increased its sales by 63.1 per cent to 6.3 billion euros. This increase was primarily caused by first-time inclusion of CP Ships for the entire year. The division's underlying result was still slightly positive at 8 million euros yet still fell considerably short of the comparable figure for the previous year (322 million euros). Decreased freight rates owing to cyclical development as well as markedly increased costs for bunker fuel and landside logistics primarily caused this financial result.

The group reported an overall increase of 6.6 per cent in sales to 20.9 billion euros (19.6 billion euros in the previous year) for its divisions. This figure covers the central operations unit and the discontinued operations in addition to the core business segments, i.e. tourism and shipping. The divisions’ underlying profit, adjusted by special items, was 369 billion euros (707 million euros in the previous year), and was therefore considerably below the comparable figure for the previous year.

The 2006 annual results for the group were considerably below the previous year's figures. Financial results as shown in the balance sheet were burdened by expenses for restructuring measures and by required depreciations on goodwill in the tourism division to the amount of 710 million euros. Moreover, non-scheduled depreciations on intangible and tangible assets to the amount of 54 million euros were required.

The total sum of non-scheduled depreciation in fiscal year 2006 therefore amounted to 764 million euros. Taking into account the tax expenses the results for the group amount to a loss of 847 million euros.

Tourism continued its positive development from the previous years, especially in the Central Europe sector. The unit's underlying operating earnings, adjusted by 26 million euros in restructuring expenses, improved 74.7 per cent to 115 million euros (previous year 66 million euros). The reported result at 90 million euros was 35.8 per cent above the previous year’s level (66 million euros).

Despite difficult market conditions in the U.K. and Ireland the earnings in the Northern Europe source market, adjusted for restructuring costs, saw an increase. At a slight decline in sales the Northern Europe sector obtained underlying results of 135 million euros (previous year: 114 million euros). Including restructuring expenses the result stands at 81 million euros (previous year: 103 million euros).

The development of the Western Europe sector has not turned out satisfactory. The unit's result worsened compared with the previous year, with burdens resulting from the weakness of the French market. The division’s underlying EBITA, after adjustments for special items, was -26 million euros, which is considerably below the comparable figure for the previous year (-0.7 million euros). Taking into account extraordinary effects from restructuring measures the result stands at -54 million euros (-3 million euros in the previous year).

In the Destinations sector the incoming agencies and the hotel sector succeeded in increasing sales compared with the previous year. The 173 million euros underlying division EBITA attained the previous year's high level. With 136 million euros, the result as shown in the balance sheet is falling below the previous year's figure (185 million euros) owing to special depreciations.

The development in shipping was characterized, on the one hand, by integration and first-time annual reporting of CP Ships and, on the other hand, by the declining development among freight rates.

Moreover, increased costs for bunker fuel, for landside logistics and an increase in charter rates for vessels had a negative impact on profit. Sales in the shipping division increased by 63.1 per cent to 6.3 billion euros in 2006 due to the integration of CP Ships for the entire year. The underlying result was slightly positive at 8 million euros (322 million euros in the previous year), when adjusted by expenses in conjunction with integrating CP Ships. The reported operating result at -106 million euros, as caused by the aforementioned factors, was considerably below the previous year's figure (319 million euros).

The group's debt situation evidences a positive development. Debt was reduced by 600 million euros compared with the previous year to about 3.2 billion euros due to divestments performed in 2006.

Outlook

Tourism

The current status of bookings is very good in most source markets. For the 2007 summer season starting in April the number of guests is currently 7.2 per cent over the previous year for the global TUI Group. Booked sales have increased by 4.7 per cent, and they are likewise considerably above the previous year's level. TUI is even closing out the winter season with a solid plus on its books. Winter sales throughout the group in the tourist sector are 5.4 per cent higher, and the number of guests 9.0 per cent higher compared with the same period last year. Both figures are ahead of current market growth.

TUI is expecting a positive development for the current fiscal year in various tourism sectors. We are generally expecting rising sales, especially in the Central Europe sector, to accompany our consistent expansion of the growth segment of modular trips and expansion of innovative products in the package tour market. Consequently, TUI aims at sales growth of up to 15 billion euros in tourism for fiscal year 2007.

It is assumed, in terms of the development of bookings, that the Central Europe sector can achieve the good results from the previous year, supported by accelerated expansion of new business segments.

TUI believes that restructuring programs, which commenced in the U.K. at a time of a declining market in the previous year, will have a stabilising impact on the development of financial results for the Northern Europe sector, with positive results most likely expected in the Nordic countries.

The market environment in France, which has been difficult thus far, is expected to improve in the course of the current fiscal year. TUI plans for a generally positive contribution to financial results in the Western Europe sector. It is also anticipated that profits in the Destinations sector will rise, which may substantially result from profitable growth in the hotel sector.

TUI has moreover instituted strategic initiatives that are aimed at increasing the financial results in the tourism division in a sustainable way. These initiatives are based on structural changes on the tourism market. The measures were announced in December 2006, and to a large extent restructuring costs have already been implemented in the accounts for 2006.

TUI is reckoning with operating earnings somewhere between 450 million and 550 million euros for 2008 in the tourism division in consideration of the profit margin risk caused by intensified competition and high prices for raw materials and kerosene.

Shipping

TUI is reckoning with an 8 to 9 per cent increase in shipped quantities in the container shipping division for 2007 and 2008 within the scope of anticipated market growth. The group is assuming that freight rates will develop differently on a regional basis. They are expected to show a slow positive development in the second half of 2007. A further increase in freight rates is expected for 2008. TUI is assuming, based on the expected developments of shipped quantities and freight rates that sales in the shipping division will rise to up to 7 billion euros in fiscal year 2007.

Financial results in the shipping division shall remain encumbered during the first half of 2007. Dominated by the realisation of synergies from the process of integrating CP Ships, which has been completed at the operational level, a significantly positive contribution to the 2007 financial results is expected, even in case of freight rates remaining low. The full synergy potential of about 220 million euros from integrating CP Ships shall be achieved in fiscal year 2008. Influenced by an anticipated growth in quantities and recovery of the freight rate level, TUI is expecting an operating profit in the range between 400 million and 500 million euros for shipping in 2008.

Group

TUI is reckoning with an increase of group turnover to up to 22 billion euros for fiscal year 2007 against the backdrop of the anticipated positive development in the tourism and shipping divisions. Markedly improved results in both divisions shall yield again a positive result for the Group.

Detailed Breakdown of the Divisions’ Development

Tourism

The Central Europe sector (Germany, Austria, Switzerland and the Hapag-Lloyd Flug and Hapag-Lloyd Express airline companies) reported a 2.5 per cent increase in the number of guests in fiscal year 2006 to 10.5 million (10.3 million in the previous year). Sales increased slightly by 0.9 per cent and amounted to 5.8 billion euros (5.75 billion euros in the previous year). The underlying result at 115 million euros, adjusted by 26 million euros for restructuring expenses caused by the program for increasing efficiency on the German market, was 74.7 per cent above the comparable figure for the previous year. Reported earnings improved by 35.8 per cent to 90 million euros (66 million euros in the previous year). The sector’s overall positive development was influenced by a considerable improvement in the operating earnings from flight operations, which contain 24 million euros in income for sale-and-lease-back contracts (18 million euros in the previous year). TUI tour operators were able to increase passenger numbers although the market and competitive situation was generally difficult in Germany during the period under review.

Improved price quality could be achieved on the market, compared with the previous year, by means of an optimised capacity policy and a rise in the number of travellers who increasingly booked early.

The number of guests in the Northern Europe sector (U.K., Ireland, Nordic countries and the Thomsonfly [charter and scheduled route] and TUIfly Nordic airlines) increased by 2.1 per cent to 7 million (6.9 million in the previous year) despite a difficult market environment. However, sales failed to reflect this development and with 4.8 billion euros fell minimally below the previous year’s figure (4.81 billion euros). Within this context, the unit reported declining sales in the U.K. and Ireland and an ability to continue to expand business volume in the Nordic countries. The sector's underlying result was 135 million euros, when adjusted by special items, which translates into and increase of 19.1 per cent compared with the previous year. The special items included posting 50 million euros in restructuring expenses and a single 5 million euros one-off charge for conversion of IT services at Thomsonfly.

Including the aforementioned items reported earnings at 81 million euros were considerably below the previous year’s figure (103 million euros).

In fiscal year 2006, 4.39 million passengers travelled with tour operators in the Western Europe sector (France, Belgium, The Netherlands and the Corsair, TUI Airlines Belgium, TUI Airlines Nederland airlines). This figure is 0.9 per cent below the previous year's level (4.4 million). Sales increased by 2.2 per cent to 2.82 billion euros (2.75 billion euros in the previous year). The positive development in Belgium and The Netherlands primarily contributed to this development. Sales in The Netherlands reached the previous year's level despite the sale of the specialist tour operator business. Sales in France declined, by contrast, due to market conditions and therefore influenced the sector's financial result. The underlying financial result, adjusted for some special one-off items in France and The Netherlands, was -25 million euros. This result is below the comparable previous year's figure

(-0.7 million euros).The reported EBITA for the Western Europe sector was -54 million euros, which is likewise considerably below the previous year's figure

(-3 million euros). The French market exclusively caused deterioration of the financial result. Weak demand, over-capacities in the flight sector and an increase in the kerosene price, due to the price of oil, caused margin losses.

Operating business developed positively in Belgium and The Netherlands and both sectors succeeded in increasing the financial result compared with the previous year.

Sales in the Destinations sector (incoming agencies and the hotel sector) increased in 2006 by 12.5 per cent to 599 million euros (533 million euros in the previous year). The underlying financial result for the sector was 173 million euros, and it attained the level of the previous year, when adjusted by one-off effects, among others an extraordinary depreciation of hotel facilities in Turkey amounting to 30 million euros. The sector's 136 million euros reported result was considerably below the previous year's figure (185 million euros).

Other Tourism

The activities of this division (business travel, IT services) were sold either entirely (TQ3) or the majority thereof was sold (TUI InfoTec). By virtue of proceeds from asset retirement the division EBITA improved to 140.8 million euros (13.8 million euros in the previous year). Sales of this division, which shall be included for the last time in 2006, decreased to 72.2 million euros (previous year: 251.5 million euros) against the backdrop of divestments carried out.

Shipping

The shipping division (container & cruise business of the Hapag-Lloyd Group) reported sales of 6.3 billion euros in fiscal year 2006 (3.8 billion euros in the previous year). This figure translates into an increase of 63.1 per cent that primarily resulted from completed integration of CP Ships. A comparison of annual figures can therefore only provide limited information. Shipped quantities increased, on a comparable basis, to 5.0 million standard containers (TEU) (4.8 million in the previous year).

An average freight rate of USD 1,430/TEU was earned in 2006, which is 2.7 per cent below the previous year's figure (USD 1,469/TEU). Sales growth in 2006 was offset by higher costs compared with the previous year: bunker costs conditional on the price of oil and costs for landside logistics increased and, along with likewise high charter rates had a negative impact on the financial result. The operating earnings were therefore merely neutral following the high profits in the previous year.

114 million euros in non-recurring expenses moreover arose in the course of restructuring and of integrating CP Ships. The financial result for the shipping division was -106 million euros (322 million euros in the previous year). Container shipping contributed -114 million euros to this result and Hapag-Lloyd cruises contributed 8 million euros.

Central operations

The financial result of central operations (corporate centre, other income and expenses, property holding companies, residual industrial activities) earned a loss of -85 million euros in 2006. However, this figure is 9.9 per cent better than in the previous year (-94 million euros). Holding costs dropped from 110 million euros to 104 million euros. These costs were offset by earnings from a revaluation of the convertible rights for the 2003 convertible bond, from real property sales as well as the sale of the company Wolf GmbH and one-off expenses.

Discontinued Operations

Sales of discontinued operations amounted to 401 million euros. The financial result of discontinued operations was 30 million euros. TUI no longer has any discontinued operations following the sale of the activities of PNA Steel Trade (PNA Stahlhandel) in the second quarter of 2006.

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This notice as well as the 2006 annual report is available for download from the web under www.tui-group.com.

Contacts:
Uwe Kattwinkel, phone +49 (0) 511 566-1417
Robin Zimmermann, phone +49 (0) 511 566-1488
Kuzey Alexander Esener, phone +49 (0) 511 566-1487

Turnover by divisions

Earnings by divisions (EBITA)

Profit and Loss Statement of the TUI Group for the period from 1 January 2006 to 31 December 2006