Tui targets margin growth for airline unit, eyes new ships

(Sharecast News) - Travel company TUI said it was targeting a profit margin for its markets and airline unit of more than 3% in the medium term and confirmed it was in talks to build two new vessels for its Marella cruise fleet. The tour giant reiterated projections for operating profit to increase by 7% -10% year-on-year from almost €1.3bn last year, driven mainly by expectations for summer 2025 with a €30m phasing effect from Easter holidays shifting to the third quarter.

It is also looking targeting new revenue streams for the airline division, including selling more seat-only flights as well as offer more business-to-business opportunities.

"The goal is to strengthen the synergies between the various business areas, offer customers more products and significantly increase the number of customer contacts throughout the year," said chief Executive Sebastian Ebel ahead of the company's capital markets day in Madrid on Tuesday.

TUI also said that it is considering renewing some of its Marella cruise ship fleet to target the UK market and is in talks for two new ships to be built and available by 2031.

"Against the background of an ageing Marella Cruises fleet, we are currently exploring future growth options on how to position our highly profitable UK market leading business in a steadily growing market," Ebel said.

"We are in discussions with shipyards and we are currently considering ordering two vessels based on a design customised for the UK market. New-build slots are tentatively available from full-year 2031 onwards."

Reporting by Frank Prenesti for Sharecast.com