TUI doubles operating result / Further reduction in net debt Further earnings improvements expected in 2005

Hanover, March 23, 2005

TUI AG, Europe's largest tourism Group, successfully completed the year 2004. 'Our integrated business model in tourism has proven its worth. We have optimised the efficiency of our processes and costs, increased utilisation of our aircraft and hotel capacity and considerably improved prices. Occupying a sustainable position in all sectors, our Group creates value', said Dr Michael Frenzel, CEO of TUI AG, at the annual press conference in Hanover, entirely satisfied with the 2004 financial year. He presented a significant improvement in operating results and a considerable increase in Group profit for the year compared to 2003. Net debt was further reduced, as scheduled.

Doubling of adjusted earnings by divisions
Group turnover totalled 18.0 billion euros, falling by 6.1% year-on-year. This decline is attributable to the divestments made in 2003 and in the course of 2004. On a like-for-like basis, Group turnover rose by 7.3%.

Earnings before taxes and goodwill amortisation adjusted for exceptional items (adjusted EBTA) doubled to 490 million euros. Earnings by divisions (EBTA) totalled 622 million euros and thus dropped below the previous year's level in nominal terms, with 2003 earnings, however, characterised by high gains on disposal from the divestment of the energy sector.

TUI significantly increased Group profit for the year to 532 million euros. This growth essentially resulted from the Group's operating business rather than proceeds from the divestment of shares. The Executive Board proposes that an attractive dividend of 77 euro cents per share again be paid to the shareholders this year.

Upswing in tourism
Following two difficult years, the tourism division saw the expected recovery. Earnings by the division rose by around 75% to 362.4 million euros. Turnover climbed by 3.6% to 13.1 billion euros, with customer numbers growing by 0.9% to 18.4 million holidaymakers. Central Europe, the sector that comprises the important source market Germany and recently went through a very difficult phase, contributed disproportionately to this upturn. The successful restructuring of distribution and the efficient product and capacity control system operated by TUI Deutschland drove earnings significantly up. Following a loss in 2003, earnings of plus 82 million euros were reported for 2004. At 65 million euros, earnings by the Northern Europe sector fell 14 million euros short of 2003 levels. However, this decline had deliberately been accepted with a view to charting the future in the British market. The restructuring measures in the UK reduced earnings by more than 30 million euros in the consolidated financial statements. The Scandinavian market, managed to further increase its earnings. At 41 million euros, earnings of the Western Europe sector, which comprises source markets France, the Netherlands and Belgium, matched the previous year's good level.

The hotel sector has developed into a strong earnings driver. Thanks to further improvements in occupancy rates in the around 280 Group-owned hotels and a positive trend in the Group's incoming agencies, the destinations sector posted earnings of 144 million euros, up by 40 million euros on the previous year.

Shipping continues growth path
The shipping sector continued the growth trend of recent years. Due to an increase in transport volume and a further rise in freight rates, performance indicators rose year-on-year, at turnover of 2.7 billion euros and earnings of 279 million euros. Turnover and earnings of the logistics division fell short of the previous year's level, despite the positive development of container shipping; this was due to the divestment of the Pracht Spedition + Logistik GmbH, the bulk and special logistics activities of the VTG-Lehnkering Group and the Algeco Group. The trading sector, comprising the US steel service business of the PNA Group, reported an extraordinarily positive business trend due to brisk economic activity in the steel market. At 116 million euros, the sector recorded its highest earnings ever.

Reduction in net debt
Group net debt continues to be reduced, as scheduled. In 2004, net debt was reduced by around 600 million euros on the previous year, totalling 3.25 billion euros at the end of the financial year.

Positive prospects for 2005 The tourism division continues its upward trend in 2005. As TUI's CEO Dr Michael Frenzel announced about one week ago at the International Tourism Exchange (ITB) in Berlin, the Group is recording an increase of 7.0% in booked turnover and 6.6% in customer numbers for the current summer season. The Western Europe sector reports a particularly gratifying trend with double-digit growth rates. Frenzel expects both tourism and shipping to generate robust growth ’which will be reflected by a further increase in our operating results in tourism and persistently high earnings in shipping in 2005'. In Dr Frenzel's view, tourism may again achieve double-digit growth in 2005. Following China and Russia, the focus will now be on India in order to tap an additional source market.

For further information please contact:
Björn Beroleit, phone +49 511 566-1310
Nicola Gehrt, phone +49 511 566-1435