TUI aims for 3% profit margin for its airline business in medium term

By Joanna Plucinska and Ilona Wissenbach

LONDON (Reuters) -Europe's largest tour operator TUI aims to raise the profit margin for its markets and airline unit to more than 3% in the medium term, it said on Tuesday, compared to a margin of 1.5% in 2024.

Last month, weak results and sluggish bookings data raised concerns about slowing European demand, knocking TUI shares. Since then, the company has been trying to expand its customer reach and boost growth.

On Tuesday, TUI said it would sell more seat-only flights and offer more products targeting businesses to make its traditional holiday package business more flexible.

"The goal is to...offer customers more products and significantly increase the number of customer contacts throughout the year," Chief Executive Sebastian Ebel said in a statement ahead of a capital markets day event in Madrid.

He said the aim was to "up-sell and cross-sell" across products, for example, by persuading customers buying a hotel room to include other products as well, like a car rental or flight.

Ebel told journalists in February that TUI wanted to expand beyond its packaged-holiday business, and include amusement and experience packages via an app.

It plans to boost its offers to more international destinations and court non-European customers.

TUI said on Tuesday it may renew some of its Marella cruise ship fleet to target the British market, and was in talks over building two new ships to be available by 2031.

(Reporting by Joanna Plucinska and Ilona Wissenbach; Editing by Kirsten Donovan and Bernadette Baum)