TUI signs deal for €1.8bn German state loan

The Anglo-German travel company said the loan from the federal government would add to the existing €1.75bn credit line with its banks, which have approved the state support. One of the conditions of the deal, announced on 27 March, is that TUI does not pay dividends during the term of the loan.

The travel industry has been one of the hardest-hit by the Covid-19 crisis as planes have been grounded, hotels closed and cruises cancelled. TUI said it applied for the loan because of the unprecedented effects of the pandemic.

The company said it was in a strong position before the crisis and that the financial year had started off with strong bookings. The emergency has raised questions about the future of the travel industry after tourists were stranded abroad and cruise ships turned into floating breeding grounds for the virus.

TUI's chief executive Fritz Joussen said: "We must bridge this unprecedented global situation. The German government has acted quickly to support jobs and companies during these exceptional times. We are now preparing intensively for when our operations can resume after the coronavirus crisis and firmly believe people will continue to want to travel and explore other countries and cultures in the future.”