By Adria Calatayud
--TUI is evaluating options to achieve optimal balance-sheet structure
--Capacity is being cut further for the winter season
--Company warned of a higher cash outflow for the December quarter
TUI AG said on Tuesday that it is evaluating options to achieve its optimal balance-sheet structure, as the company warned it is cutting winter capacity further and it expects increased cash outflows in the coming quarter.
The German travel group, which has a listing in London, said its total cash and available facilities as of Sunday would amount to 2.0 billion euros ($2.35 billion) -- including an additional funding package of EUR1.2 billion from the German government it agreed to last month--compared with EUR2.4 billion as of Aug. 12.
TUI said bookings for this year's summer season are 83% lower than last year, as it has been hurt by continuous changes in travel advice by various governments across its markets. Changing government recommendations have led to higher customer refund obligations over the last few weeks which, combined with weaker capital inflows from bookings, resulted in a cash outflow for late August and September, the company said.
TUI said it continues to anticipate a monthly outflow in the "low single-digit" hundreds of millions of euros for the quarter ending Sept. 30. For the quarter to the end of December, the company expects its monthly cash outflow to be slightly higher, between low and mid-single digit hundreds of millions.
The company, which last month said it would cut winter capacity by 40%, said it has reduced capacity for its winter 2020-2021 program by a further 20% in light of continuing uncertainty. It added that destination availability is presently being influenced by government policy stemming from the pandemic, and that this was likely to remain the case for the next few quarters.
For summer 2021, the travel operator said it expects to operate at 80% adjusted capacity, and this is in line with its views at the time of its third-quarter results.
TUI said its global realignment program, which will affect up to 8,000 jobs aiming to permanently reduce its overhead cost base by 30%, is firmly under way.
"TUI will emerge a stronger, leaner, more digitalized business and is well positioned to benefit from the expected recovery," Chief Executive Friedrich Joussen said.
Shares in London at 0923 GMT were up 0.6% at 272.60 pence.