Category Archives: TUI Airlines (Germany)

TUI AG and German government agree on additional stabilisation package of 1.2 billion euros

TUI AG made this announcement:

  • Increase of the existing KfW tranche by EUR 1.05 billion and Convertible Bond for EUR 150 million
  • Stabilisation package strengthens TUI’s position in a volatile market environment over the 2020/21 winter season and in the case of any further long-term travel restrictions and disruptions due to COVID-19 
  • TUI would thus currently have cash and available facilities of 2.4 billion euros

TUI and KfW have agreed to extend the existing KfW credit line by 1.05 billion euros. The drawing of this amount is subject to TUI issuing a Convertible Bond in the amount of 150 million euros to the Economic Stabilisation Fund (WSF) and a waiver by the bondholders of the Senior Notes due in October 2021. Both conditions as well as other formal requirements need to be fulfilled by 30 September 2020.

The €1.2 billion stabilisation package strengthens the Group’s position and would provide sufficient liquidity in this volatile market environment. This will cover both the seasonal swing in tourism through winter 2020/21 and other long-term travel restrictions and disruptions related to COVID-19.

Including the funds from the additional stabilisation package, TUI AG would thus have cash and credit facilities of 2.4 billion euros.

TUI CEO Fritz Joussen: “The additional stabilisation package allows us to focus on the operations and at the same time to drive forward the realignment of the Group. Already before the pandemic, we had initiated the next transformation of TUI: the transformation into a digital platform company. This transformation will now be significantly accelerated. Our integrated business model is intact. Summer holidays are taking place again in all markets. We introduced massive cost reductions early and implemented them quickly and consistently. However, no one knows at present when a vaccine or medication will be available and what effects the pandemic will have in individual markets in the coming months. Therefore, it is right and important to take further precautions together with the German Federal government. Since the lifting of travel restrictions for most European destinations, TUI has benefited from a partial restart of the programme for summer 2020. As customers start their holidays and increasingly book future trips, the Group is generating revenue again. Hotels of the TUI hotel brands also reopened and the first cruises from Germany were launched.

Like the first KfW loan of 1.8 billion euros, which was granted in April, the second KfW loan is topping up the existing bank credit facility (“Revolving Credit Facility”, RCF). The necessary changes have already almost been implemented with the RCF bank consortium.

The potential Convertible Bond with an initial term of six years would be acquired by the WSF after the conclusion of a takeover agreement. The bond would bear interest at a rate of 9.5 per cent. TUI has a right of redemption as soon as the loan of 1.05 billion euros has been repaid. TUI would issue the Convertible Bond under exclusion of subscription rights and use an existing capital reserve resolution for this purpose. If fully converted, this would currently represent a share in TUI of up to nine per cent.

The conversion price per share would be fixed at 60 percent of the average stock price prior to the issuance, but would not be below 2.56 euros.

The first KfW loan is subject to conditions, including that TUI may not pay any dividends during the term of the loan and that restrictions apply to share buybacks. The stabilisation measure provides for further restrictions, for example on investments in other companies and on the remuneration of the members of the Executive Board, as long as the WSF remains invested.

The additional KfW loan is also subject to the provison that the holders of the bond maturing in October 2021 waive any future limitation of TUI’s indebtedness.oday leading travel companies TUI and Booking.com announced a strategic global experiences, activities and excursions partnership, providing millions of Booking.com customers worldwide with direct access to the rapidly growing activities segment of TUI and its digital subsidiary Musement. The contracts have been signed and the cooperation will start in summer 2020.

All 5 TUI airlines to be merged, based in Hanover, as fleets are reduced

TUI fly Germany has made this announcement:

  • Supervisory Board supports restructuring plans and mandates management to negotiate with works councils and trade unions
  • Existing employment guarantee until the end of 2021 for all German TUI companies also applies to the restructuring of TUI fly
  • Commitment to company headquarters and the airline base Hanover: Hanover and Düsseldorf remain the largest bases of the TUI fly fleet

TUI fly Germany Managing Director Oliver Lackmann explains after the meeting of the Supervisory Board of TUI fly GmbH in Hanover:

“At the June 18 meeting, the management again presented the plans for the restructuring of the German holiday airline to the TUI fly Supervisory Board and explained in detail the need for changes. There is no doubt that these are major changes and cutbacks for our employees and for the company. Nobody takes the decision lightly, neither I myself as managing director and flight captain nor the supervisory board. But the TUI fly fleet is too large for the customer base of our German TUI tour operator. We must reduce this fleet and work more closely together within the five airlines of the Group. Otherwise, as a premium provider of holiday flights, we will further increase our competitive disadvantage over other airlines.

Even before the Coronavirus pandemic, the German airline market was characterised by considerable overcapacity and a fierce price competition. The coronavirus pandemic has led to severe disruptions in the airline sector, especially for holiday flyers. The regular business of TUI fly has come to a complete standstill since mid-March. According to forecasts, air traffic in the coming year will still be significantly lower than the volume in 2019. Even in the peak season, the TUI fly fleet was not able to achieve a cost-covering occupancy rate before Coronavirus. In the past, between 14 and seven aircraft with crews were permanently leased to Air Berlin and later to Eurowings. These were thus aircraft and seats which we as a tour operator were unable to fill with our own customers. The situation has now become even more difficult due to the pandemic. In the long-term interests of all employees of our airline – and in the interests of TUI as a whole – we must make TUI fly fit for the future.

We want to come to an agreement with the representatives of the workforce as quickly as possible. The Supervisory Board of TUI fly has mandated the management to enter into negotiations with the works councils and the trade unions. The negotiations are also based on the employment protection scheme in place until the end of 2021, agreed with the Group Employee Council for all TUI Group companies in Germany. It excludes dismissals for operational reasons with effect before the end of 2021. We see this agreement, which has been in place since 2019, as an opportunity to make the restructuring as socially responsible as possible. The Supervisory Board also underlined this goal today. We are very aware that the reduction of each individual position is about colleagues who are highly loyal to their airline. Our aim is to secure as many jobs as possible in TUI fly in the long term. However, this will only succeed if we adjust the size of the airline to a healthy and future-proof level. We will take into account the interests of the employees, the Hanover airport location and TUI as a whole in our decisions. We are now at the beginning, not at the end, of the negotiations on the design of the restructuring. The core of the plans is the announced adjustment of the fleet to about half of the current 39 aircraft.

In addition, central functions are to be more closely integrated across all five Group airlines. In a first step, TUI’s European airlines will be merged under one company. This central flight division for TUI Group airlines will be based in Hanover.

TUI fly plans to cut jobs in technical, administrative and crew functions since fewer aircraft will be used. In future, TUI fly intends to concentrate on the departure airports of Hanover and Düsseldorf as the largest fleet locations, as well as Frankfurt, Munich and Stuttgart”.

Currently there are five airlines in the TUI Group operating around 150 medium- and long-haul aircraft, including the largest fleet of the Boeing 787 Dreamliners. The airlines are TUI Airways, TUI fly, TUI fly Belgium, TUI fly Netherlands and TUI fly Nordic, serving more than 180 destinations around the world.

TUI fly Germany aircraft photo gallery:

TUI fly Germany to fly long-haul with two Boeing 787 Dreamliners

TUI fly Germany made this announcement (translated from German):

The decision for long-haul flights at TUI fly in Germany has been made and confirmed by the TUI Group.

With the beginning of the winter timetable 2020/21, TUI fly will start long-distance flights from Germany.

Two Boeing 787 Dreamliner aircraft will fly to destinations in the Caribbean and Mexico.

“An agreement with the social partners makes the decision for the long haul flights possible. Strategically, the long-haul segment brings several advantages for the TUI Group: The feeder flights for cruises of the “Mein Schiff” fleet of TUI Cruises are operated under their own flag. The TUI Group is strong on long-haul destinations and owns a comprehensive hotel portfolio in the Caribbean. The approach of long-haul destinations, such as the Cape Verde Islands, is also being considered. There, the TUI Group has a strong presence with its own hotel brands such as RIU, Robinson and TUI Blue, “says Oliver Lackmann, Managing Director of TUIfly GmbH.”

TUI fly Germany aircraft photo gallery:

Nuremberg to become Eurowings’ twelfth base, to be operated by TUI fly

TUI  (Germany) Boeing 737-8K5 SSWL D-ATUC (msn 34684) BSL (Paul Bannwarth). Image: 934268.

Eurowings has made this announcement:

On the way to truly nationwide coverage in Germany and Austria, Eurowings is now set to integrate Nuremberg Airport into its offering as one of its own bases. With one aircraft stationed there, Europe’s fastest growing airline will offer flights from Franconia to the leisure resorts of Majorca, Heraklion, Catania and Olbia from the end of March. This means that Nuremberg will become Eurowings’ twelfth base.

A further flight on Sunday evening will also increase the frequency on the existing Berlin/Tegel-Nuremberg route.

The new Nuremberg routes will be operated with a Boeing 737-800 which Eurowings has leased from TUI fly. The aircraft will depart for Palma de Majorca eight times a week, it will fly to both Catania and Olbia airports on the Italian islands of Sicily and Sardinia twice a week and to Heraklion on the Greek island of Crete every Monday and Friday.

The opening of a base in Nuremberg is yet another milestone for Eurowings in a phase of rapid growth. Oliver Wagner, CCO of Eurowings, “With more than 30 million passengers carried last year, Eurowings has clearly become one of the top three in Europe’s low-cost airlines. We are consolidating this status with further growth this year from Germany and Austria. After introducing many new routes from Munich, the addition of Nuremberg now completes our offering in the south of Germany. From a business point of view, we are expecting a very successful launch in Nuremberg, mainly due to the flights to Majorca and three other attractive holiday islands.”

By basing an aircraft there, the airline is also contributing to the retention of jobs in the key aviation industry in Nuremberg. Around 30 flying staff will then work directly for Eurowings, many more will be employed at Nuremberg Airport in connection with the new flight offering.

Eurowings‘ new route offering is a welcome addition for both business and private travellers throughout the Nuremberg metropolitan area and complements the existing domestic German offering perfectly. Eurowings is the fourth airline to base an aircraft at Nuremberg Airport. This shows us that Northern Bavaria is an attractive market for airlines and the airport has very efficient processes,” says Dr. Michael Hupe, the airport’s Managing Director.

Eurowings is also continuing to expand its good reputation as a holiday airline. In addition to major European cities, more and more attractive holiday destinations are being added to the flight schedule. Eurowings now offers flights to Majorca, which is the focus of the launch in Nuremberg, from more than 20 airports in Germany and Austria. This makes the airline, part of the Lufthansa Group, one of the three most important airlines on the sunshine island in the Mediterranean.

And soon Eurowings will also be heavily involved in the long-haul in Southern Germany: in summer, flights will be offered from Munich to ten overseas destinations in Central America, North America, South Africa and Asia. The new routes from Nuremberg supplement the Eurowings offering in Bavaria which now includes a wide choice of attractive flight destinations in Germany, Europe and worldwide.

TUI fly Deutschland, formerly TUIfly, is a German leisure airline owned by the travel and tourism company, TUI Group.

Copyright Photo: TUI (Germany) Boeing 737-8K5 SSWL D-ATUC (msn 34684) BSL (Paul Bannwarth). Image: 934268.

TUI fly Deutschland aircraft slide show:

TUI and Niki move one step closer to a joint venture based in Vienna

TUI Airlines (Germany) Boeing 737-86J SSWL D-ABKI (msn 37748) PMI (Ton Jochems). Image: 933944.

TUI AG‘s Supervisory Board has given the green light on November 23, 2016 for further steps with the goal to create a new European airline joint venture with Etihad Aviation Group. TUI Group’s supervisory body approved the plan to contribute its German leisure airline subsidiary TUI fly GmbH (TUIfly-TUI Airlines Germany) to a joint venture with Etihad. Etihad is in negotiations with Airberlin to acquire its touristic operations primarily in Southern Europe and North Africa, and including Airberlin’s participation in Niki, with the objective to contribute it to the joint venture.

The new airline joint venture, headquartered in Vienna, is planned to serve a broad route network with its two airlines, TUI fly and Niki, a total fleet of around 60 aircraft and a seat capacity of 15 million seats per year, operating from key departure airports in Germany, Austria and Switzerland.

TUI AG is to hold a stake of 24.8% in the joint venture, with Etihad holding 25% of the interests. The remaining 50.2% would be held by the existing private foundation Niki Privatstiftung.

The commitments made to the TUI fly employees remain in place and are currently being further negotiated and specified. This includes the commitments to the Hanover location.

The contractual negotiations between all involved stakeholders are expected to be finalized in the next few weeks. Details regarding the future joint venture will be jointly presented by Etihad and TUI after successful completion of the negotiations.

The planned joint venture is subject to approval by the relevant antitrust and aviation authorities.

In the summer of 2007, Hapag-Lloyd Express (HLX) and Hapagfly merged to form TUIfly. The airline is a wholly-owned enterprise of the TUI Group, the world’s leading tourism troup with headquarters in Hanover, Germany. TUIfly flies to the classic holiday regions all around the Mediterranean, the Canary and Cape Verde Islands, Madeira and Egypt for TUI and other tour operators. By the summer of 2014, TUIfly used 40 Boeing 737 aircraft to fly to these destinations. TUIfly headquarters are at the Hanover Airport.

Top Copyright Photo: TUI Airlines (Germany) Boeing 737-86J SSWL D-ABKI (msn 37748) PMI (Ton Jochems). Image: 933944.

TUI:

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Niki:

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Bottom Copyright Photo: Niki Luftfahrt (flyNiki.com) Airbus A320-214 OE-LEF (msn 4368) ZRH (Rolf Wallner). Image: 927323.

Niki Luftfahrt (flyNiki.com) Airbus A320-214 OE-LEF (msn 4368) ZRH (Rolf Wallner). Image: 927323.

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