TUI Aims 3% Profit Margin For Its Airline Biz In Medium Term

Europe's biggest travel operator TUI (TUI1n.DE) has announced a goal to increase the profit margin for its markets and airline division to over 3 per cent in the medium term, up from a margin of 1.5% in 2024, as stated on Tuesday. Last month, poor results and slow booking figures heightened worries regarding diminishing European demand, negatively impacting TUI's stock. Since that time, the company has been working to increase its customer base and enhance growth.

On Tuesday, TUI announced it would increase seat-only flight sales and provide additional products aimed at businesses to enhance the flexibility of its traditional holiday package offerings. "The objective is to...provide customers with additional products and notably boost the number of customer interactions during the year," Chief Executive Sebastian Ebel stated in a release before a capital markets day event in Madrid.  He mentioned that the goal was to "up-sell and cross-sell" among various products, such as encouraging customers who are purchasing a hotel room to also add other items, like a car rental or flight.

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In February, Ebel informed reporters that TUI aimed to broaden its scope beyond packaged holidays by offering entertainment and experience packages through an app. It aims to enhance its services to additional international locations and attract customers from outside Europe. On Tuesday, TUI announced it might refresh parts of its Marella cruise ship fleet to cater to the British market and was discussing the construction of two new ships to be ready by 2031.