Europe’s largest tour operator TUI Group has lowered its profit expectations and withdrawn its revenue guidance, citing uncertainty linked to the ongoing Iran conflict, as the crisis continues to disrupt the global travel industry.
The company said it now expects underlying earnings before interest and taxes (EBIT) for the financial year ending September 2026 to range between €1.1 billion and €1.4 billion. This marks a downgrade from its earlier projection of 7% to 10% growth on last year’s €1.4 billion. Shares in TUI slipped by 2.6% following the announcement, adding to a broader decline over recent months.
TUI, which operates its own airline fleet and hotel network, has been directly affected by rising jet fuel costs and shifting travel patterns. The company joins other European carriers such as easyJet and Wizz Air in warning that the conflict is weighing heavily on the sector.
The group reported that customer demand has shifted away from parts of the Eastern Mediterranean, including Turkey, Cyprus and Egypt, towards destinations in the Western Mediterranean. This change has impacted both its airline and hotel operations, which together account for more than two-thirds of its revenue.
TUI also noted that travelers are increasingly delaying bookings, opting to confirm trips closer to departure dates. This trend reflects growing caution among consumers amid geopolitical tensions and rising travel costs.
Despite the downgrade, the company pointed to some resilience in its operations. It expects a modest improvement in second-quarter EBIT, forecasting gains of between €5 million and €25 million, compared with a loss of €207 million during the same period last year.
TUI said cost-saving measures, particularly within its airline division, are helping offset some of the financial pressure. Efficiency programmes are expected to absorb around €40 million in additional costs incurred in March due to the conflict, including expenses related to operational disruptions and repatriation efforts.
Since the outbreak of hostilities in late February, the company has repatriated approximately 10,000 customers, including around 5,000 cruise passengers from its Mein Schiff vessels.
Fuel price volatility remains a major concern, though TUI said it is 83% hedged for jet fuel this summer, providing some protection against further price spikes.
Analysts expect more airlines to revise their forecasts as first-quarter results are released in the coming weeks, with capacity cuts and weaker earnings likely across the industry.
For now, TUI’s outlook reflects a sector grappling with uncertainty, as the duration and wider impact of the Middle East conflict remain unclear.
