TUI AG said on Tuesday that it was launching a global realignment program which will affect up to 8,000 jobs and aims to permanently reduce its overhead cost base by 30%.
The London-listed German travel company said that it was targeting permanent annual savings of more than 300 million euros ($353.1 million), and that it expects the first benefits to be delivered from fiscal 2020, and the full benefits be delivered by fiscal 2023.
The company said it was reducing its capacity for summer 2020 and winter 2020-2021 due to the volatile changes in travel restrictions stemming from the coronavirus pandemic. It added that destination availability is presently being influenced by government policy stemming from the pandemic, and that this was likely to remain the case for the next few quarters.
The travel operator said that summer bookings are down 83% versus the prior year, and that its winter 2020-2021 program has been reduced by around 40% adjusted capacity to reflect current travel restrictions.
The travel operator said that for summer 2021 it expects to operate at 80% adjusted capacity, and that this is in line with its views at the time of its third quarter results.