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Tui travel firm warns Boeing grounding to hit earnings Tui travel firm warns Boeing grounding to hit earnings
(32 minutes later)
Travel firm Tui has warned that the grounding of Boeing 737 Max planes will cost it €200m (£173m) this year. Travel firm Tui has warned that the grounding of Boeing 737 Max planes could cost it up to €300m (£258m).
Tui has a fleet of about 150 aircraft, including 15 of the grounded Boeing models. A further eight 737 Max planes are due for delivery by the end of May.Tui has a fleet of about 150 aircraft, including 15 of the grounded Boeing models. A further eight 737 Max planes are due for delivery by the end of May.
The financial hit is due to the cost of aircraft replacements, higher fuel bills and other disruption costs.The financial hit is due to the cost of aircraft replacements, higher fuel bills and other disruption costs.
Tui also warned that if the 737 Max remained grounded by July, it could cost the firm another €100m. Tui says it will use eight older Boeing 737s, plus spare and charter aircraft, to "guarantee" customer holidays.
In a statement, Tui said: "The group is utilising spare aircraft of its fleet, extending expiring leases for aircraft that were supposed to be replaced by 737 MAX aircraft, as well as leasing in additional aircraft." The holiday firm said it would take a €200m hit should Boeing 737s resume flights at the latest by mid-July.
Tui will be using eight older Boeing 737s, plus spare and charter aircraft, to fulfil its obligations to holidaymakers, a Tui spokesman said. However, if in the coming weeks it looks as though the planes will not be flying by mid-July, Tui said it would extend the measures it was taking until the end of September, costing the firm another €100m.
The spokesman declined to say whether Tui would seek compensation from Boeing. Boeing grounded its entire global fleet of 737 Max aircraft earlier this month after one of the planes, operated by Ethiopian Airlines, crashed, killing all 157 passengers and crew.
This came five months after a fatal crash involving another 737 Max plane operated by Lion Air in Indonesia
Shares slide
In a statement, Tui said: "The group is utilising spare aircraft of its fleet, extending expiring leases for aircraft that were supposed to be replaced by 737 Max aircraft, as well as leasing in additional aircraft."
A spokesman declined to say whether Tui would seek compensation from Boeing.
Tui shares fell more than 8% after the announcement.
The firm said: "No dates have yet been announced for modifications of the existing aircraft model by the manufacturer, neither for approval of such modifications by the Federal Aviation Administration and the European Aviation Safety Agency.
"Therefore, Tui has taken precautions, along with other airlines, covering the time until mid-July, in order to be prepared for Easter, Whitsun, and start of the summer holiday season and to secure holidays for its customers and their families."