TUI Group has continued its repositioning of in the wake of the Covid-19 pandemic, with TUI France set to focus on the high-margin business with a few core brands in the future.
As such, offers that are high-volume but do not generate “sufficient” margins will be removed from the portfolio.
TUI said it therefore expect business to decline, and will this close its own distribution network as a result.
The company said its 70 travel agencies would be sold or closed.
As a result of the newly tailored product range and the changed distribution model, the company will be significantly smaller.
The project foresees a reduction of 583 jobs, in the scenario of the closing of all own retail shops, which is approximately 60 per cent of the current TUI France staff base.
The changes are now being discussed with the relevant committees and employee representatives in France.
The future plan should then enable TUI France to break even from 2021 onwards.
TUI France was already loss-making before the pandemic.
“In a structurally challenging market with a high cost structure and low margins, the company had been making losses in recent years,” TUI said in a statement.
“In the wake of the corona pandemic, the situation for TUI France has again deteriorated significantly.
“A far-reaching package of measures is now needed to create a perspective for the company within the group.”
Overall, the TUI Group aims to reduce its overhead cost base by 30 per cent worldwide.
