Britain’s biggest tour operator has hailed its first flights this weekend as a ‘hugely symbolic moment’ for the industry – but warned of challenges ahead after the summer season was cut critically short.
Package holiday giant Tui yesterday launched its first passenger flights from the UK for almost four months when two Boeing 737 jets took off at 6.40am from Gatwick to Ibiza and Birmingham to Majorca.
Andrew Flintham, managing director of Tui’s UK and Ireland division, said the flights marked a return to normality after major uncertainty over whether summer holidays would get the green light.
Revealing details of his plans exclusively on Sunday, he said customers were ‘genuinely excited’ having ‘waited a long time for those holidays’.
He added: ‘People need a bit of normality, and going on a summer holiday is a return to what they would normally do at this time of year. I think that’s really psychologically important.
Since March 17, Tui’s UK fleet has run a handful of repatriation flights for crew stranded on its cruise ships. It is now playing catch-up.
Tui’s opening schedule of 44 flights a week, initially from Gatwick, Manchester and Birmingham to eight destinations, is just 4 per cent of its usual European summer flying programme.
But, Flintham points out, the planes are 90 per cent full, now that initial plans to keep middle seats empty have been replaced with making masks mandatory and enhanced cleaning.
He now wants to rapidly scale up the operation after the Government finally gave the green light for UK-quarantine-free travel to 73 destinations from two days ago. In August, Tui will ramp up to about 500 flights a week to 19 destinations, including Turkey, Crete, Rhodes, Majorca and the Canary Islands.
The industry’s restart programme has been hampered by the Government’s 14-day quarantine policy for travellers arriving into the UK and confusion over ‘air bridges’ exempting travel to low-risk countries.
Flintham was among those lobbying Transport Minister Grant Shapps to scrap the quarantine rule, which he called ‘the single most damaging thing that could have happened to the industry when we were all trying to move to restarting’.
Since the Government scrapped a blanket quarantine rule, Flintham said Tui had had ‘a surge of bookings’ with about 75 per cent of its partner hotels ‘open for business’ and around 50 per cent full.
Flintham added that the 73 destinations on the Government’s ‘safe list’ cover ‘the lion’s share of where we hoped to fly this summer’. Once Greece opens to British tourists this Wednesday, he said, the biggest omission for Tui is Cyprus.
The country is blocking Britons until August, although the Turkish occupied north of the island will open from Thursday to Britons who take three coronavirus tests.
Customers feeling nervous booking holidays can reschedule free of charge or accept Atol-protected travel vouchers. Those waiting for refunds for cancelled trips have complained of administrative chaos.
But Flintham said Tui had now processed 85 per cent of the 1.5 million claims, repaying €165 million to €180 million (£150million to £160million) in refunds each month. He said: ‘We are sorry the early days were so difficult, but we are now in a good place to manage that process.’
Flintham said that of the 18 UK airports it usually flies from, there would ‘still be a handful we won’t be operating from’ even by the end of summer.
British travellers are the second largest market for the Anglo-German firm, which runs package holidays and cruises to more than 100 global destinations.
Tui Group, whose shares are listed both on the London Stock Exchange and in Frankfurt, is based in Hanover and had an annual turnover of €19billion in 2019 through its five airlines, 18 cruise ships and 1,600 travel agents. But the global travel ban has forced it to make deep cuts, with a cloud over up to 8,000 jobs.
Even before the pandemic, Tui’s group chief executive Friedrich Joussen warned of ‘headwinds’ in its travel shops and airlines businesses, and announced plans to transform the group from a ‘traditional tour operator’ to ‘a highly profitable hotel and cruise group’.
On Monday last week, Tui completed its €1.2billion deal to sell its Hapag-Lloyd Cruises subsidiary to its joint venture with cruise giant Royal Caribbean. Just three days later, the Foreign and Commonwealth Office fired a broadside at cruise ships’ restart plans by effectively banning cruise holidays.
On Thursday, the FCO advised travellers against cruises, suggesting anyone with an upcoming sailing should contact their travel firm. Most insurance policies do not cover travel against FCO advice.
To stay afloat until demand recovers, Tui has taken out a €1.8billion crisis loan from the German government. Its restructuring will cut costs across the group by 30 per cent, putting up to 3,600 of its 12,000 UK jobs at risk.
Flintham said: ‘We have borrowed a whole load of cash from the German government to get us through, but, as our chief executive likes to say, that is borrowed money with repayment terms, and we have to restructure our cost base to make us fit for the future.’
There is no ‘absolute proposal’ yet for the UK business, he added, but its 500 high street shops are ‘under review’, suggesting possible closures in an era of digital bookings.
Flintham is also in talks with Ministers about further aid measures for the sector, and proposes cutting air passenger duty and reforming restrictive rules on landing slots.
He said: ‘There is a danger that when everyone starts flying again in August, the Government heaves a sigh of relief. But it should be looking to support those industries that have a more difficult restart.’
He added: ‘We are confident we can survive the winter – but it’s going to be a challenge.’