The travel industry has been having its ups and downs over the last few years. Many airlines are finally starting to get back on track with many businesses sending people on trips again. One airline that is definitely seeing a turnaround is TUIfly, the largest airline operator in Europe in terms of revenue.
The airline recently announced that it is on track to reach its annual goal for profit growth. This news came after the airline posted a big 21 percent jump in its third-quarter profits. The airline said that it believes this increase occurred mostly because of sales that were brought in by holidays.
TUI Travel, the airline’s parent company, has a lot on its plate right now. It is in talks with TUI AG, a German-based company. This group already owns 55 percent of TUI Travel. Currently, both companies are talking about a merger. The deal is estimated to be worth around £4.4 billion. On top of that, it would create the largest leisure tourism company in the world. Although nothing is final yet, the two companies have until September 19 of this year to announce their final proposals.
Right now would be a great time for TUI AG to buy TUI Travel because the company is enjoying 7 to 10 percent growth thanks to operating profits during the past 12 months. Peter Long, the current chief executive of TUI Travel, said that he cannot make any kind of public statement right now on the merger. He also said that he couldn’t make a comment on the company’s forecast for this year. This is because his company is in the middle of an offer period. During these kinds of talks, he is restricted on what he can talk about.
This is not the first time that these two companies talked about merging together. In fact, the two companies talked about a merger in 2013. However, this deal fell through after TUI AG announced that making an offer at that point in time wouldn’t make sense. This was due to the share price at that point in time.
It is unknown how people feel about the merger. In fact, shares for TUI AG dropped 14 percent since the day just before the merger talks were officially announced. Most of this had to do with the way the company was failing to perform as promised. In fact, stocks were trading nearly 9 percent lower at the time, so a fall in value was expected.