Devastating wildfires in Rhodes cost flight provider TUI £21 million

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Travel agent TUI has revealed it will have to pay out more than £21 million in compensation as a result of the devastating wildfires that broke out in Rhodes last month. 

A quarterly update published on Wednesday (August 9) by the German-based airline said there will be extensive costs for cancellations and lost business, compensation for customers, and repatriation flights.

It evacuated 8,000 guests from Rhodes after wildfires broke out last month, with around five percent of all its flights going to the Greek island in the summer.

But the company’s chief executive claimed the disasters resulting from a heatwave sweeping across Europe had only “temporarily dampened” a successful year thus far. 

Sebastian Ebel, in comments attached to the quarterly update, even said his company’s response to the crisis had been an example of “comprehensive service in extraordinary situations”. 

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A statement from the flight provider read: “TUI took comprehensive care of the guests on site and also with additional return flights. 

“For the customer it has once again been shown that the package tour booked with the tour operator offers great advantages and comprehensive service in extraordinary situations.” 

Concerning the financial repercussions, it added: “The measures taken in Rhodes have a financial impact which will be reflected in the results for the full year. 

“With the development of a broader and year-round range of products and services already underway, TUI will also cushion the impact of similar events to a greater extent in the future.”

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Despite the costs, Sebastian Ebel, TUI’s chief executive, said there was a big discrepancy between reports on the temperatures in the region and what people experienced.

He said the climate was “not as it was described”, notwithstanding the fact that Greece battled 10 major wildfires last month, including blazes outside Athens and on Rhodes, during three successive heatwaves.

He stressed that 80 percent of its guests holidaying in Rhodes were unaffected by the heatwaves since they had been staying in the north of the island – the wildfires only affected the south. 

He added that the events only affected demand in the short term, with bookings for the last week five percent higher than the equivalent period last year. 

The group revealed it swung to a third-quarter profit for the first time since the beginning of the pandemic.

Sales jumped as average selling prices surged by more than a quarter compared with summer 2019, and seven percent higher than last year.

Tui said the price increases reflect the popularity of summer holidays and its customers’ continued willingness to prioritise spending on travel and experiences.

The firm reported underlying group earnings before interest and tax of £145 million in the third quarter, up from a loss of £23 million this time last year.

Total bookings are about 95 percent of pre-pandemic levels, TUI said.

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