London, United Kingdom. Europe’s largest tour operator TUI cut its underlying operating profit forecast and suspended its revenue guidance, citing uncertainty caused by the Iran war, sending its shares down 2.6% on Wednesday.
Forecast changes and conflict impact
TUI, which operates its own fleet of aircraft and is exposed to travel disruptions and tight jet fuel supplies, joined airlines including easyJet and Wizz Air in warning of the negative impact of the conflict.
TUI expects underlying earnings before interest and taxes (EBIT) for its fiscal year ending Sept. 30, 2026 to be in the range of 1.1 billion euros to 1.4 billion euros ($1.3 billion to $1.6 billion). It had previously expected an increase of 7% to 10% from 1.4 billion euros in the previous year.
TUI said it continued to show strong operational improvement in the first half of fiscal 2026, but that the ongoing conflict in the Middle East and uncertainty over its duration were limiting near-term visibility and driving consumer caution.
Shifts in demand and booking patterns
TUI said its airlines segment and its hotels business have been affected by a partial shift in customer demand from Eastern to Western Mediterranean destinations, with a drop in demand for Turkey, Cyprus and Egypt in particular.
The company said customers were also booking closer to departure dates, a trend easyJet also warned about earlier this month.
TUI’s markets and airline segment accounts for more than two-thirds of its revenue.
Sector outlook and second-quarter expectations
Bernstein analysts said TUI shares were down 25% over the past three months, pricing in some of the effect.
European airlines are set to report first-quarter results from next week, and analysts expect broad capacity cuts and further profit warnings as curtailed jet fuel supplies and rising costs affect the sector worldwide.
TUI expects an improvement in underlying EBIT at constant currency of 5 million to 25 million euros for the second quarter, compared with a loss of 207 million euros in the previous year.
How do you expect the conflict-related uncertainty to affect travel bookings in the coming months?
