What TUI doesn’t say

By | Category: Travel rumblings

Yesterday morning TUI announced its third-quarter results.

Why should this interest readers especially since, I’m prepared to bet, most of you don’t have shares in TUI?

cartoon of a traveller
TUI’s third-quarter accounts don’t mention EU261 liabilities © Dan Sperrin

Firstly the company provides a bellweather view of the tour operating industry telling us that that the eastern Mediterranean is attracting more interest from holidaymakers and the western end – principally Spain I would think – is a little less appealing.  Secondly it tells us that it is finding customers are booking later than it expected and it puts this down to the fact to last year’s hot summer and Brexit. (What isn’t being blamed on Brexit at the moment?)

It also says that the company will be affected due the grounding of the Boeing 737 Max aircraft but that it has brought in other aircraft so holidaymakers shouldn’t be affected. TUI will just have to assess how much the grounding has cost it which, at the moment it says is  €144 million in the third quarter.

But more interesting is what the company does not say.

Court cases are outstanding against the company because it has not paid compensation to holidaymakers for delayed or cancelled flights under EU261. Despite having proof and with TUI having agreed that it is liable, solicitors are going to court on behalf of clients to get the company to pay up. TUI is holding on to the compensation of clients as long as it can. It also has tens of thousands of lodged claims which are still being assessed. If all were due then TUI would owe a couple of hundred million euros. Is the company waiting until the six year time period for making a claim expires and will then claim it ist liable. If that is its thinking, it is in for a nasty surprise.

But where does this any comment about EU261 claims appear in its accounts.

Solicitors like Bott & Co have expressed their frustration with the company and holidaymakers must feel suitably concerned. The company does not and I cannot see in this twety page report that it acknowledges it might have a liability.

All TUI lists in the report are “financial liabilities” and “other financial liabilities” without specifying what these are. Could this be where liabilities and potential liabilities under EU261 are to be found?  

Surely it is time for the regulators to insist that all travel related companies list any liability or potential liability for EU261 for two reasons. The first is that it indicates to the holidaymaker an idea of how it operates. Secondly, it reveals to investors that there is a liability which it could face but equally could resolve by speedier settlement.

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