FILE- In this March 13, 2019, file photo people work in the flight deck of a Boeing 737 MAX 8 airplane being built for TUI Group parked next to another MAX 8 also designated for TUI at Boeing Co.'s Renton Assembly Plant in Renton, Wash. U.S. prosecutors are looking into the development of Boeing's 737 Max jets, a person briefed on the matter revealed Monday, the same day French aviation investigators concluded there were "clear similarities" in the crash of an Ethiopian Airlines Max 8 last week and a Lion Air jet in October. (AP Photo/Ted S. Warren, file)
March 29, 2019 - 5:17 AM
BERLIN - European travel operator TUI Group warned Friday that its profits this year could be a quarter lower than anticipated as a result of the grounding of Boeing 737 Max jets.
TUI, which is headquartered in Germany and has operations in several European countries, has 15 737 Max aircraft. The planes have been grounded after two deadly crashes within five months.
Another eight planes were scheduled for delivery by the end of May.
TUI said that, so far, it has taken precautions until mid-July. If the planes can fly by then, underlying earnings will be about 200 million euros ($230 million) lower than previously expected because of costs including the lease of additional aircraft and extending expiring leases for planes that were supposed to be replaced by the new jets.
The company cautioned that there is "considerable uncertainty" about when the 737 Max will return to service and said it will need to extend its precautions until the end of the summer season in September "should it not become clear within the coming weeks" that the planes will be able to fly by mid-July. That extension could cost another 100 million euros.
TUI previously forecast that earnings this year would be "broadly flat" compared with last year's level of 1.18 billion euros. It said they could now be between 17 and 26 per cent lower, depending on when the planes can fly again.
TUI shares dropped 6.8 per cent to 717.20 pence in London trading.
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This story has been corrected to date of end of summer season in 5th paragraph.
News from © The Associated Press, 2019