Europe's largest tour operator TUI cut its full-year underlying operating profit forecast and suspended its revenue guidance on Wednesday, citing uncertainty caused by the Iran war. TUI, which operates its own aircraft fleet and is exposed to travel disruptions and tight jet fuel supplies, joined airlines from easyJet to Wizz Air in warning of the negative impact of the conflict on profit margins.
European airlines are set to report their first-quarter results starting next week and analysts expect broad capacity cuts and further profit warnings as the impact of curtailed jet fuel supplies and spiralling costs roils the aviation sector worldwide.
TUI now expects underlying earnings before interest and taxes (EBIT) for its fiscal year ending September 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 in the previous year.
It's shares were down 2% in morning trade.
"While continuing to demonstrate strong operational improvement in H1 FY 2026, the ongoing conflict in the Middle East and the uncertainty surrounding its duration continue to limit near-term visibility and drive consumer caution," the group said in a statement.
The group said its airlines segment as well as its hotels business have suffered from a partial shift in customer demand from Eastern to Western Mediterranean destinations in the wake of the Middle East conflict. The Markets and Airline segment makes up for over two-thirds of TUI's revenue.
Customers were also showing more caution and booking closer to departure dates, it said. Britain's easyJet warned of a similar trend earlier this month. TUI expects to report an improvement to underlying EBIT at constant currency of 5 million to 25 million euros on a loss of 207 million in the previous year for the second quarter of its 2026 financial year.
It said the payoffs of its efficiency programs targeting its airline business should help absorb about 40 million euros in extra costs from the Iran war incurred in March, including repatriation efforts and related operational disruptions.
Since U.S.-Israeli airstrikes on Iran on February 28, TUI had repatriated around 10,000 people in March, including about 5,000 passengers from cruise ships Mein Schiff 4 and Mein Schiff 5.
They were able to leave the Gulf safely on Sunday after they had remained in the ports of Abu Dhabi and Doha respectively, with all itineraries for these vessels cancelled until mid-May.