At its half-year results announcement on May 13’s morning, TUI Group revealed plans to initiate a 30 per cent cost-cutting programme to ride out the Covid-19 business crisis, a move that will see the global company cutting investments, size and presence around the world.
In a breaking report by TTG UK, TUI Group’s chief executive Friedrich Joussen, said: “TUI should emerge from the crisis stronger. But it will be a different TUI and it will find a different market environment than before the pandemic. This will require cuts: in investments, in costs, in our size and our presence around the world.
“We must be leaner than before, more efficient, faster and more digital.
“We will implement our “asset right” strategy, which we launched in 2019, even more purposefully and quickly. We will become more digital at all levels – in particular, we will accelerate the expansion of digital platforms in new markets and for our activities in the destinations.”
The company’s move to “permanently reduce” overhead cost base will have an impact on potentially 8,000 roles globally.
“In order to return to the successful development of the past years after the crisis, we must now implement the realignment quickly,” said Joussen.
The group received a bridging loan of €1.8 billion (US$1.9 billion) in March to cushion the unprecedented effects of the pandemic until normal business operations can be resumed. In April, the banks providing TUI’s existing credit line of €1.75 billion also gave their approval for the contractual integration of the new credit.
TUI added that the loans received are to be repaid within a short period of time “and the high level of debt is to be rapidly reduced again”.