The cruise operations of TUI AG, the German travel company that is listed in London, have made a deep loss in the financial year to 30 September in the wake of the Covid-19 pandemic, the company said in a statement.

TUI AG owns 50% of TUI Cruises, which operates a brand of the same name in the German market plus the luxury and expedition market brand Hapag-Lloyd Kreuzfahrten. The company is 100% owner of Marella Cruises that caters for the UK market.

Revenues fell to €472.6 million from €965.8 million and underlying EBIT became negative by €322.8 million compared to being positive by €366.0 million in the 2019 financial year.

TUI Cruises and Hapag-Lloyd Cruises resumed partial operations from Germany at the end of July, operating a reduced fleet with European itineraries. This was made possible by Germany’s decision to permit cross-border travel in EU states and Schengen Area from mid-June, underlining the advantage of our diversified markets.

“In combination with already comprehensive hygiene measures on board our fleet, extensive COVID-19 preventative protocols have been introduced as part of our mandatory safety measures. COVID-19 testing is now included within our German cruise packages and a negative result is compulsory for customers and crew prior to departure,” the company said.

Average daily rate  obtained by TUI Cruises fell to €141 from €174, while the figure for Marella Cruises decreased by £3 to £146 and that of Hapag-Lloyd Kreuzfahrten by €40 to 601    

There remains considerable uncertainty regarding the likelihood and nature of further lockdowns and travel restrictions over the next few months, the distribution of an effective vaccine and the shape of the economic recovery. “As a result the TUI Executive Board refrains from issuing new guidance for the Financial Year 2021 under the current circumstances,” the company stated

The company expects FY21 to be a year of transition and for the Group to return to profitable growth from FY22 onwards. “The additional financing package agreed strengthens our position and provides us with sufficient liquidity reserves in this volatile market environment, balancing out the presumed travel restrictions until the beginning of the 2021 Summer season,” it said.

“We are actively streamlining the business through targeted cost cutting, whilst prioritising growth spend on digitalisation initiatives. We will be selective in our investment strategy which will be supported by disposals and we will be focused on asset light structures. Our trusted, leading brand with differentiated products is strongly positioned to benefit from the expected market consolidation. Our digitalisation transformation, underpinned by cost control, and balance sheet discipline will drive our return to healthy financial metrics and profitable growth,” TUI said.