logo-loader
viewTUI AG

TUI trims payments and deliveries of Boeing 737 MAX planes over two years

As part of the deal, the aircraft manufacturer will provide compensation and credits for some future deliveries

TUI AG -

TUI AG (LON:TUI) says it has agreed to reduce payment and deliveries of aircraft from Boeing Co (NYSE:BA) over the next two years, reducing its spending requirements during the coronavirus pandemic.

As part of the deal, the aircraft manufacturer will provide compensation for the grounding of its 737 MAX plane, which was removed from service last year after two crashes.

TUI, Europe’s largest travel company, said this will be received over two years and will cover a “large part” of the financial impact it felt last year, which is estimated at around €400-500mln.

Furthermore, the Anglo-German group said Boeing will also provide it with credits for some future orders and agreed that TUI will take delivery of fewer 737 MAX aircraft over the next few years.

Deliveries of the 61 aircraft the travel group has ordered will be delayed by two years on average.

The FTSE 100 company said this will “significantly reduce TUI's capital and financing requirements for aircraft in the coming years”.

Fritz Joussen, TUI’s chief executive, said: “This enables TUI to rapidly adapt its fleet growth to the currently challenging market environment. And it supports our plan to downsize the aircraft fleet and reduce the capital requirements for aircraft investments in the group.”

TUI shares leapt 9% on Wednesday morning to 488.9p, where they are still down 50% since the start of the year.

   --Adds shares--

Quick facts: TUI AG

Price: 322.5 GBX

LSE:TUI
Market: LSE
Market Cap: £1.9 billion
Follow

Add related topics to MyProactive

Create your account: sign up and get ahead on news and events

NO INVESTMENT ADVICE

The Company is a publisher. You understand and agree that no content published on the Site constitutes a recommendation that any particular security, portfolio of securities, transaction, or investment strategy is...

FOR OUR FULL DISCLAIMER CLICK HERE

Watch

Alpha Growth PLC using experienced team to start Alpha Growth and Income...

Alpha Growth PLC (LON: ALGW) CEO Gobind Sahney joined Steve Darling from Proactive to discuss the fund called Alpha Growth and Income fund or AGI. This funds prospective client are family offices, pension funds, and other institutions that still wish to receive some income but also want their...

4 hours, 48 minutes ago

2 min read