Holiday giant TUI taps Germany for extra €1.2bn in Covid loans 

TUI has received a second loan lifeline from the German government since the start of the Covid crisis

Holiday company TUI has said the German government has agreed a €1.2bn aid package to help boost its finances and ensure it survives into 2021 as the pandemic continues to wreak havoc on the travel industry.

The company said the extra liquidity will help it endure the coming winter season and beyond.

With the new loans, which add to state-backed loans TUI has already received, the company will have cash and available facilities of €2.4bn.

The pandemic halted the Anglo-German holiday company’s activities for around three months to June. 

It had been hoping for a recovery from July but new restrictions have meant more holiday cancellations and a further dent to its finances.

TUI, the world’s largest tourism group, warned in May it needed to cut 8,000 jobs and shed 30% of its costs.

Last month, it said it will shut 166 stores in the UK and Ireland in response to the downturn in travel caused by the pandemic.

It is the second time Germany has stepped in to help TUI, after State-owned development bank KfW provided the company with a €1.8bn loan in April.

TUI said the additional tranche will be structured as an increase to TUI’s existing revolving credit facility.

The additional funds are reliant on a KfW bond issuance and waivers from current bondholders.

• Reuters