Widespread travel disruption at UK airports such as Heathrow and Gatwick cost holiday company Tui £63 million ($76.1 million) in the third quarter ended June 30.
Customers were affected by about 200 cancelled flights in May and June as the industry struggled to cope with a steep increase in demand for travel amid a shortage of staff.
Tui remained loss-making in the three months to the end of June due to the costs of the airport disruption, reporting underlying pre-tax losses of £23 million in its third quarter.
While the costs of the airport troubles kept the holiday company in the red over its third quarter, the result still marked a significant improvement on the £566 million underlying loss suffered a year earlier, thanks to the recent rebound in demand for travel.
Putting aside the costs of the airport disruption, the company said it would have reported underlying earnings of £41 million in the three months to June 30 — its first quarterly profit since the Covid-19 crisis struck.
Europe's largest tour operator was particularly hard hit by the chaos at Manchester Airport, caused by a chronic lack of staff such as baggage handlers, which resulted in dozens of flights being scrapped.
Passengers were also hit by lengthy delays that left people, including children, stranded in terminals for hours.
There were mass redundancies at airports and bosses during the coronavirus-induced slowdown and bosses are now scrambling to hire more air traffic control personnel, security guards and baggage handlers.
Sebastian Ebel, Tui’s chief financial officer and incoming boss, said he would hold “intensive” talks with airports and airlines, as well as resorts, as he looks to improve the customer experience.
Mr Ebel said the “entire European airline sector" continued to face challenges.
“We are consistently tackling the operational challenges of the restart,” he said. “We want to offer our guests the usual high Tui standards of quality and service.
“The topics of quality and customer experience are therefore at the top of my agenda.
“To this end, I will engage in intensive dialogues with the destinations, retail, but also with system partners such as airports and airlines.”
Mr Ebel will take over as chief executive of Tui at the end of August when Fritz Joussen steps down.
Tui expects to bounce back close to pre-pandemic demand levels this summer, operating 82 per cent of its holiday programme in its third quarter, with customers at 84 per cent of 2019 levels.
The group also expects to report significant underlying earnings for the full year.
However, it issued a warning that surging inflation due to the Ukraine war was affecting its costs due to rising fuel prices while rising energy bills could knock demand for holidays as consumers cut back.
In a bid to reduce upheaval to passengers’ travel plans, Heathrow and Gatwick ordered airlines to cut their flight schedules, sparking a furious row.
Heathrow, the UK’s busiest airport, warned it did not have the capacity to cope with rising traveller numbers due to staff shortages.
Emirates slammed the west London airport’s decision, calling its terms “entirely unreasonable and unacceptable”.
The UAE airline later reached a deal with Heathrow bosses, winning the right to retain its scheduled flights but agreed not to sell any more tickets until the middle of August.
Travel disruption at Heathrow
TOURNAMENT INFO
Women’s World Twenty20 Qualifier
Jul 3- 14, in the Netherlands
The top two teams will qualify to play at the World T20 in the West Indies in November
UAE squad
Humaira Tasneem (captain), Chamani Seneviratne, Subha Srinivasan, Neha Sharma, Kavisha Kumari, Judit Cleetus, Chaya Mughal, Roopa Nagraj, Heena Hotchandani, Namita D’Souza, Ishani Senevirathne, Esha Oza, Nisha Ali, Udeni Kuruppuarachchi
Key figures in the life of the fort
Sheikh Dhiyab bin Isa (ruled 1761-1793) Built Qasr Al Hosn as a watchtower to guard over the only freshwater well on Abu Dhabi island.
Sheikh Shakhbut bin Dhiyab (ruled 1793-1816) Expanded the tower into a small fort and transferred his ruling place of residence from Liwa Oasis to the fort on the island.
Sheikh Tahnoon bin Shakhbut (ruled 1818-1833) Expanded Qasr Al Hosn further as Abu Dhabi grew from a small village of palm huts to a town of more than 5,000 inhabitants.
Sheikh Khalifa bin Shakhbut (ruled 1833-1845) Repaired and fortified the fort.
Sheikh Saeed bin Tahnoon (ruled 1845-1855) Turned Qasr Al Hosn into a strong two-storied structure.
Sheikh Zayed bin Khalifa (ruled 1855-1909) Expanded Qasr Al Hosn further to reflect the emirate's increasing prominence.
Sheikh Shakhbut bin Sultan (ruled 1928-1966) Renovated and enlarged Qasr Al Hosn, adding a decorative arch and two new villas.
Sheikh Zayed bin Sultan (ruled 1966-2004) Moved the royal residence to Al Manhal palace and kept his diwan at Qasr Al Hosn.
Sources: Jayanti Maitra, www.adach.ae
The%20specs%3A%202024%20Mercedes%20E200
%3Cp%3E%3Cstrong%3EEngine%3A%20%3C%2Fstrong%3E2.0-litre%20four-cyl%20turbo%20%2B%20mild%20hybrid%0D%3Cbr%3E%3Cstrong%3EPower%3A%20%3C%2Fstrong%3E204hp%20at%205%2C800rpm%20%2B23hp%20hybrid%20boost%0D%3Cbr%3E%3Cstrong%3ETorque%3A%20%3C%2Fstrong%3E320Nm%20at%201%2C800rpm%20%2B205Nm%20hybrid%20boost%0D%3Cbr%3E%3Cstrong%3ETransmission%3A%20%3C%2Fstrong%3E9-speed%20auto%0D%3Cbr%3E%3Cstrong%3EFuel%20consumption%3A%20%3C%2Fstrong%3E7.3L%2F100km%0D%3Cbr%3E%3Cstrong%3EOn%20sale%3A%20%3C%2Fstrong%3ENovember%2FDecember%0D%3Cbr%3E%3Cstrong%3EPrice%3A%20%3C%2Fstrong%3EFrom%20Dh205%2C000%20(estimate)%3C%2Fp%3E%0A
Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
