TUI to push ahead with ‘vigorous’ cost cuts
Thomson’s German parent TUI AG has reacted to a “deterioration in market conditions” through more cost cutting and speeding up expansion of internet business.
A meeting of the group’s supervisory board led to a change in management structure, with TUI UK and Northern Europe boss Peter Rothwell gaining centralised control of tourism for all source markets, together with the group’s aviation and internet units.
The group’s two German airlines, Hapagfly and Hapag-Lloyd Express, are to be integrated.
The company said: “Further strategic options in the German aviation market are being examined.”
TUI, which has cut more than 6,000 staff from its tourism unit and made savings of 360 million euros in four years, said while this action had stabilised its earnings situation, it was not enough to realise the results targets.
“With regards to the current competition situation, significant price increases are hardly realisable,” a statement said.
“In order to ensure that results targets in the tourism division are met, even though margins remain under pressure, further efficiency improvement are being realised,” the statement went on.
“This includes pushing ahead more vigorously with the cost cutting programmes that have already been initiated in all source markets and the accelerated expansion of the internet business.”
The news follows the announcement earlier this week of the closure of Thomson’s Glasgow call centre.
Report by Phil Davies
Phil Davies
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