High air ticket prices aren’t deterring European travelers, as TUI narrows losses ahead of London delisting

TUI is something of a bellwether for the European travel industry. The German group is Europe’s largest tourism operator, serving about 28 million customers through its flights, resorts, cruises and more. And if its quarterly earnings release is anything to go by, the summer’s looking bright.

TUI reported its highest-ever second-quarter revenues of €3.66 billion ($3.96 billion) on Wednesday, up 16% compared to a year earlier. Notably, strong demand for trips and vacations has sent prices soaring, but that’s not stopped people from splurging anyway.

During the three months to Mar. 31, the German giant saw 2.8 million guests flocking to its 400 hotels and 16 cruise ships, which helped boost its earnings.

For the crucial upcoming summer season, TUI said bookings had hit about 60% of its markets and airline capacity, which it described as “promising.”

“Travelling is very popular with people. We see trends that will further strengthen this in the future: experiences are becoming more important than possessions, and the middle classes are growing in many parts of the world,” said TUI CEO Sebastian Ebel.

A few challenges remain, Ebel added, such as the Red Sea crisis, but cruises and hotels have been running full since last year, which helped the Hanover, Germany-based company curb its underlying losses in the first three months of 2024 to €189 million ($204.6 million)— an improvement of more than 22%.

“The message delivered was that, even if the group is still loss making, the situation has improved quite significantly,” Deutsche Bank analyst Andre Juillard said in a note Wednesday.

Like most travel and tourism groups, TUI’s financial performance is seasonal, and it is quite normal to report losses in the first half of its year before the summer season gets underway. Last year, TUI’s full-year underlying EBIT was €977.2 million ($1.06 billion), and it has issued guidance that its 2024 full-year result will exceed this by at least 25%.

Boom amid listing move

This earnings release marks TUI’s last before it delists from the London Stock Exchange in June to shift its primary listing to its home country following an overwhelming majority vote from shareholders in February.

“The advantages of a main listing in Frankfurt are obvious: the structures are simplified, liquidity is centralized and improved in one trading venue and the simplified structure supports the EU requirements for ownership and control of our airlines,” CFO Mathias Kiep said when announcing the decision to move listing bases.

TUI’s move comes as a string of London-listed companies have opted to move elsewhere in Europe—or the U.S.—for better access to capital and less onerous compliance standards. Europe’s largest budget airline, Ryanair, left the LSE in 2021—its primary listing is now on Dublin’s Euronext—while Cambridge U.K.-based chip company Arm Holdings decided to list in the States last year.

The German company has been expanding its offerings to appeal to more travelers seeking greater affordability and flexibility. Earlier this year, TUI struck a deal with Ryanair to offer the Dublin-based carrier’s flights through its website.

“We’re well underway with what we want to achieve this year,” Ebel said during an earnings call.

It’s a strong position to be in as the peak summer season approaches.

This story was originally featured on Fortune.com