TUI to downsize fleet due to decreased passenger demand

Saturday, June 20, 2020

Germany’s TUI Group has decided to sharply downsize its airline fleet and has already started the consultation process. According to the latest plans, the TUI fly Germany fleet would shrink from 39 to 17 Boeing 737-800 aircraft. However, this would also mean Germany will witness a job loss of around 900 individuals consisting of 720 flight crew and 180 ground staff approximately. As of now, TUI fly will continue to be based in Hanover and the hubs at Düsseldorf and Hanover will remain the largest bases of the fleet.

The company has also proposed around five airlines would be merged into one single company headquartered in Hanover and comparatively fewer bases in Germany. TUI fly has also informed that the support of the supervisory board for restructuring plans. In addition, it also has a mandate to negotiate with works councils and trade unions. The carrier also mentioned that all German TUI companies have an existing employment guarantee until the end of 2021 that continues to remain in place.

Oliver Lackmann, Managing Director, TUI fly Germany said in a recent press statement that the present changes are major and can be considered as cutbacks for the company and its employees. He informed that the TUI fly fleet is too large for the customer base of the company’s German TUI tour operator. Therefore, the company decided to reduce the fleet in order to work more closely together within the five airlines of the group. He mentioned that though the decision was grave for all the authorities it was necessary to avoid increased competitive disadvantage over other airlines.

He further informed that the German airline market was characterised by considerable overcapacity and a fierce price competition even before the COVID-19 outbreak. He mentioned that the pandemic intensified the crisis similar to how it caused severe disruptions in the airline sector as a whole and specifically for holiday flyers. He shared that TUI fly’s regular business has come to a complete standstill since mid-March and also said that according to reports, air traffic in the coming year will still be significantly lower than the volume in 2019.

He mentioned that the TUI fly fleet was not able to achieve a cost-covering occupancy rate even during the peak season before the coronavirus pandemic. He informed that the company has already leased between 14 and seven aircraft with crews to airBerlin and Eurowings, permanently. He shared that as a tour operator they failed to fill these aircrafts and seats even with their own customers. He said that the already critical situation became even more difficult due to the pandemic. Therefore, the company has now decided to make TUI fly fit for the future in the long-term interests of all employees of the airline and TUI as a whole.

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