TUI (TUI1.DE), the world’s largest tour operator, said on Wednesday that it would receive an additional €1.2bn (£1.08bn, $1.4bn) aid package from the German government to help it survive the devastating fallout from the coronavirus pandemic on the travel industry.
“The €1.2bn stabilisation package strengthens TUI’s position and would provide sufficient liquidity in this volatile market environment to cover TUI’s seasonal swing through winter 2020/21… and in the case of any further long-term travel restrictions and disruptions related to COVID-19,” TUI said in a statement.
The German tour company had already been approved for €1.8bn loan from KfW, the state development bank in April.
The company said in its statement that including the additional aid package announced today, it would now have cash and available facilities of €2.4bn.
Since the COVID-19 pandemic brought global travel to a standstill in March, airlines, tour companies and hotels have struggled to stay afloat. Many have turned to their governments for financial support, including Lufthansa, which got a €9bn government bailout, and began to prepare for mass layoffs.
TUI announced in May that it would cut up to 8,000 jobs to reduce costs, describing the coronavirus pandemic as “unquestionably the greatest crisis the tourism industry and TUI has ever faced.”
At the beginning of August, Virgin Atlantic said it would “essentially run out of money” by October if it wasn’t rescued. The company announced massive restructuring plan last month, which would include £400m of deferrals and waivers by shareholders and at least £450m of deferrals by creditors.
The company said it is “confident” a £1.2bn rescue plan will tide it through the coronavirus crisis, despite filing for protection under US bankruptcy law.