TUI expects stronger Q2 result but lowers full-year outlook amid geopolitical uncertainty

Germany

Operational improvement continues, but Middle East conflict weighs on visibility and demand

TUI AG expects to report a marked improvement in its second-quarter performance for the 2026 financial year. Underlying EBIT at constant currency is projected to increase by €5 million to €25 million compared with the prior year, when the result stood at -€207 million. The improvement is primarily driven by progress in the Markets + Airline segment, although around €40 million in costs linked to the Iran conflict weighed on March performance.

Despite solid operational momentum in the first half of the year, the company points to continued uncertainty due to the geopolitical situation in the Middle East. This is affecting short-term visibility and leading to more cautious booking behaviour among customers.

Full-year guidance adjusted as uncertainty persists

Against this backdrop, TUI has revised its outlook for the full 2026 financial year. The Group now expects underlying EBIT at constant currency to range between €1.1 billion and €1.4 billion, compared with €1.413 billion in the previous year. Earlier guidance had indicated growth of 7 to 10 per cent. At the same time, TUI has suspended its revenue guidance until market conditions stabilise.

“Our ambition is to achieve an underlying EBIT towards the level of the prior year, supported by transformation benefits and growth in Cruises,” the company stated, noting that the outlook depends on a recovery in affected markets.

Repatriation efforts and cruise disruptions

Following the escalation of the conflict in late February, TUI repatriated around 10,000 guests in March, including approximately 5,000 cruise passengers from the ships Mein Schiff 4 and Mein Schiff 5, as well as a similar number of customers from European source markets. An additional 1,500 crew members were also brought back.

As a result of the situation, both vessels remained temporarily in Abu Dhabi and Doha, with itineraries cancelled until mid-May. After a pause in hostilities, the ships were able to leave the Persian Gulf on 19 April and are scheduled to resume operations in the Mediterranean for the summer season.

Shift in demand and cautious booking patterns

In its core Markets + Airline and Hotels & Resorts segments, TUI is observing a shift in demand from Eastern to Western Mediterranean destinations. At the same time, customers are increasingly booking closer to departure dates.

For summer 2026, booked revenue in Markets + Airline is currently 7 per cent below the previous year. Hotel occupancy for the second half of the year is also down by around 7 per cent. The development is linked to the impact of the Iran conflict on destinations such as Turkey, Cyprus and Egypt, as well as the aftermath of a hurricane in the Caribbean.

Hedging strategy supports stability

To mitigate cost volatility, TUI has hedged 83 per cent of its jet fuel requirements for summer 2026 and 62 per cent for winter 2026/27. More than 80 per cent of energy costs for its cruise operations are also hedged.

Despite the challenging environment, the Group highlights its strong financial position and balance sheet as key factors enabling it to navigate current conditions. The revised outlook assumes no further escalation of geopolitical tensions and continued availability of fuel, while management continues to monitor developments closely.