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TUI examining all options to boost pandemic defences, says CEO

BERLIN (Reuters) - Travel group TUI TUIGn.DETUIT.L is considering additional state aid, raising new equity and potential disposals to ride out the COVID-19 pandemic, its chief executive said on Friday.

FILE PHOTO: Passengers from Germany, who were frontline workers during the coronavirus disease (COVID-19) outbreak, arrive on a TUI Airways flight at Kos International Airport on the island of Kos, Greece, June 29, 2020. REUTERS/Alkis Konstantinidis/File Photo

Sources close to the matter told Reuters this week that Europe’s largest tour operator was in talks with the German government on up to 1.8 billion euros ($2.1 billion) in state aid because two earlier bailouts have proved insufficient.

“At the moment we cannot and must not exclude any option, not even that we need additional loans,” Chief Executive Friedrich Joussen told German magazine Der Spiegel in an interview published on Friday.

“Nor can we rule out the possibility of raising new equity or selling parts of the company at an appropriate time.”

The Hanover-based group’s revenue collapsed in its third quarter, tumbling by 98% because of coronavirus travel restrictions. It has cut costs by 70% and has already called on 3 billion euros of government support in one form or another.

TUI had assets that would be of interest to investors, such as hotels and real estate, Joussen said.

“We could bundle part of that in property funds, thus rising hidden reserves,” he said, adding that there will be no emergency sales.

The CEO said he has great hopes that business can recover quickly once a COVID-19 vaccine is available.

U.S. drugmaker Pfizer PFE.N and German partner BioNTech BNTX.O on Monday released data showing that their vaccine was 90% effective in a large clinical trial, lifting hopes that inoculations could start early next year.

“2021 will still be a transition year, with summer bookings so far being very strong,” Joussen said. “For 2022, we expect demand to be at pre-crisis level.”

Reporting by Kirsti Knolle; Editing by David Goodman

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