TUI's New Operating Chief Takes Charge as Middle East Tensions Reshape Summer Bookings

TUI slashes profit forecast, restructures executive board, and faces summer booking slump as customers avoid the eastern Mediterranean due to geopolitical tensions.

The travel giant TUI is entering the peak summer season with a freshly reorganised executive board, a slashed profit forecast, and a customer base that is visibly shying away from the eastern Mediterranean. The combination of internal restructuring and external geopolitical shocks has placed the company under pressure not seen in years.

A Streamlined Command Structure

Marco Ciomperlik steps into the newly created role of Chief Operating Officer on 1 May, bringing together the "Holiday Experiences" and "Markets + Airline" segments under a single roof. The move consolidates operational control and is designed to unlock synergies while trimming costs. Both David Schelp and Peter Krueger, the previous heads of those divisions, are leaving the group as a result of the shake-up.

Chief executive Sebastian Ebel is simultaneously taking direct charge of the hotel and cruise joint ventures, while the mergers and acquisitions portfolio shifts to the remit of finance chief Mathias Kiep. The leaner structure is intended to sharpen decision-making at a moment when the operating environment has turned unusually hostile.

Profit Warning Hits as Bookings Slump

Just days before the management reshuffle takes effect, the board was forced to tear up its earnings guidance. On 22 April, TUI cut its full-year forecast for adjusted operating profit to between €1.1 billion and €1.4 billion. That compares with €1.413 billion in the prior year and represents a potential decline, rather than the growth the company had previously flagged.

The culprit is the escalating conflict in the Middle East. During March alone, flight cancellations, repatriation efforts and stranded cruise ships cost the group roughly €40 million. Customers are responding by delaying holiday plans and shifting their preferences away from the eastern Mediterranean.

Booked revenues for the summer season are currently running seven percent below last year's level. Hotel occupancy for the second half is tracking at a similar discount. The destinations bearing the brunt of the pullback are Turkey, Cyprus and Egypt. Some demand is migrating toward Spain, Portugal and the Atlantic coast of North Africa, but the redistribution is far from a full offset. TUI is having to reallocate capacity, renegotiate hotel contracts and redraw flight schedules — all of which eats into margins and adds operational complexity.

Fuel Hedging Provides a Buffer

On the cost side, the picture is more stable. TUI has locked in 83 percent of its jet fuel requirements for the summer season through hedging contracts. In the cruise division, more than four-fifths of energy costs for the current financial year are similarly covered. Bernstein analyst Richard Clarke noted that the profit warning is therefore not a function of rising energy prices — the problem is purely one of demand.

Despite the March disruption, TUI still expects a modest improvement in the second quarter. Adjusted EBIT for the period is forecast to come in between €5 million and €25 million ahead of the prior-year figure, even after accounting for the €40 million geopolitical hit.

Technical Signals Point to Oversold Territory

The market has taken a dim view of developments. The stock closed at €6.49 on Friday, leaving it down more than 27 percent since the start of the year. The relative strength index stands at 27.3, a level that technically signals an oversold condition. Yet the shares remain well below their moving averages — trading roughly 19 percent under the 200-day line — suggesting that buyers have yet to step in with conviction.

A modest operational bright spot emerged at sea: Mein Schiff 4 and Mein Schiff 5 departed the Persian Gulf on 19 April and are scheduled to resume Mediterranean itineraries from mid-May. Earlier in March, TUI had evacuated roughly 10,000 guests and 1,500 crew members from the region.

The Calendar Looms Large

All eyes are now fixed on 13 May, when TUI publishes its results for the second quarter and first half of the financial year. That report will provide the first concrete look at whether the booking weakness is stabilising or deepening. For a company entering its most critical selling season with a new operating chief, a reduced profit target, and a customer base rattled by geopolitical uncertainty, the stakes could hardly be higher.