Europe’s largest tour operator, TUI Group, has downgraded its operating profit forecast and suspended its revenue guidance, citing uncertainty caused by the war in Iran. Its shares fell 2.6% on Wednesday.
In a statement, TUI said its airline and hotel divisions had been affected by a partial shift in customer demand from eastern Mediterranean destinations to western Mediterranean locations. Demand has declined in particular for Turkey, Cyprus and Egypt.
Industry impact from conflict
TUI, which operates its own fleet of aircraft and is exposed to travel disruption and constrained jet fuel supplies, joined airlines including easyJet and Wizz Air in warning about the negative impact of the conflict in Iran.
Analysts at Bernstein said TUI’s shares have fallen by 25% over the past 3 months, reflecting part of this trend.
European airlines are due to report first-quarter results next week, with analysts expecting a broad decline in passenger numbers and further profit warnings, as reduced jet fuel supply and rising costs weigh on the sector globally.
Lower earnings outlook
TUI expects underlying earnings before interest and tax (EBIT) for the financial year ending 30 September 2026 to range between €1.1bn and €1.4bn. It had previously forecast growth of 7% to 10% from €1.4bn in 2025.
“While it continues to deliver strong operational improvement in the first half of the 2026 financial year, the ongoing conflict in the Middle East and uncertainty over its duration continue to limit short-term visibility and drive consumer caution,” the company said.
TUI said customers are showing greater caution and are booking closer to departure dates. easyJet warned of a similar trend earlier this month.
Second-quarter improvement expected
For the second quarter, TUI expects underlying EBIT, at constant currency, to improve to between €5m and €25m, compared with a loss of €207m in the same period last year.
The company said it had hedged 83% of its jet fuel needs for the upcoming summer, helping it remain resilient despite fuel price volatility.
Since the start of the conflict, following US–Israeli strikes on Iran on 28 February, TUI said it repatriated around 10,000 people in March, including about 5,000 passengers from the cruise ships Mein Schiff 4 and Mein Schiff 5.
CNA