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TUI AG said the grounding of Boeing Co.’s 737 Max jet will shave 200 million euros ($225 million) from earnings as it leases extra aircraft to make up for lost capacity, sending the stock down 10 percent.
The hit means full-year profit will decline 17 percent, Hanover-based TUI said in a statement Friday, adding that the revised guidance assumes that the Max, idled worldwide after two fatal crashes in less than five months, will resume flights by mid-July.
TUI is the biggest 737 Max operator in Europe after Norwegian Air Shuttle ASA, with 15 of the planes in its fleet out of a total of 150, based in the U.K., Belgium, the Netherlands and Sweden. A further eight of the aircraft were scheduled for delivery by the end of May.
“This impact is especially attributable to costs related to the replacement of aircraft, higher fuel costs, other disruption costs, and the anticipated impact on trading,” the company said. It had previously forecast that full-year earnings before interest, tax and amortization would be “broadly flat.”
TUI shares in Germany fell the most since Feb. 7 and were trading 7.3 percent lower at 8.30 euros as of 9:16 a.m. local time.
©2019 Bloomberg L.P.
This article was written by Christopher Jasper from Bloomberg and was legally licensed through the NewsCred publisher network. Please direct all licensing questions to legal@newscred.com.
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