TUI’s Twin Headwinds: A Crisis at Sea and a Shifting Summer Season

TUI slashes FY 2026 profit forecast amid Iran tensions, evacuates 10,000 guests, and sees summer bookings shift from Turkey to western Mediterranean.

The Iran conflict has carved a deep gash through TUI’s financial year, forcing the travel giant to slash its profit outlook while its cruise ships dodged live fire in the Persian Gulf. The fallout is now reshaping how and where holidaymakers book their summer breaks.

A Profit Warning with a Silver Lining

TUI’s management has trimmed its full-year earnings forecast, now targeting adjusted EBIT of between €1.1bn and €1.4bn for fiscal 2026. That replaces an earlier ambition of 7 to 10 percent growth over the prior year. The revenue guidance has been suspended entirely until the geopolitical fog clears.

Yet the second quarter tells a different story. TUI expects adjusted EBIT to land between €5m and €25m above the prior-year period — a striking improvement from the €207m loss recorded in Q2 2025. The rebound underscores the group’s operational resilience even as external shocks mount.

Ships Under Fire, Passengers Rescued

The most dramatic chapter unfolded at sea. For more than 50 days, several cruise liners remained trapped in Middle Eastern ports. On April 19, Iran briefly opened the Strait of Hormuz, allowing the Mein Schiff 4, Mein Schiff 5, and the MSC Euribia to sail through in a convoy. Tehran shut the passage again almost immediately after they cleared.

The escape was not without danger. Iran’s Revolutionary Guards fired on at least one vessel. The Mein Schiff 4 came under threat, with a strike reported close to the ship — though no damage was sustained. Both TUI ships can now resume their summer itineraries: the Mein Schiff 5 departs Heraklion on May 15, and the Mein Schiff 4 sails from Trieste on May 17.

The crisis forced TUI to repatriate roughly 10,000 guests in March, including around 5,000 cruise passengers. The total Iran-related costs for that month alone hit €40m, driven by evacuation operations and business interruptions.

Summer Bookings Slump as Travel Patterns Shift

The conflict has triggered a fundamental change in booking behaviour. Forward sales for summer 2026 are running 7 percent below last year’s level, with demand for Turkey, Cyprus and Egypt particularly weak. A hurricane in the Caribbean has compounded the shortfall.

Tourists are redirecting their holidays toward the western Mediterranean. Spain, Portugal and the North African Atlantic coast are gaining ground. But the trend toward last-minute decisions is complicating TUI’s capacity planning, making it harder to lock in margins.

Hedging Offers a Buffer

TUI has moved to shield itself from further cost shocks. By April 15, the group had hedged 83 percent of its jet fuel requirements for the summer season. For winter 2026/27, that figure stands at 62 percent. In the cruise division, more than 80 percent of energy costs for the full year are covered.

Barclays Stays Bullish Despite the Cuts

Analysts are taking a measured view. Barclays’ Andrew Lobbenberg has trimmed his price target on TUI from €10.50 to €9.00, while maintaining an “Overweight” rating. The revision reflects the lowered near-term earnings outlook, but Lobbenberg’s estimates for 2027 and 2028 remain largely unchanged.

The stock has shed nearly 30 percent since the start of the year, trading around €6.35 — close to its 52-week low. That leaves Barclays’ new target implying roughly 40 percent upside from current levels.

What Comes Next

TUI will publish its full second-quarter results on May 13. That report will reveal whether the shift toward western Mediterranean bookings can stabilise the summer season — and whether the group’s reduced profit targets hold water in a world where travel demand is increasingly dictated by geopolitics.