TUI, the holiday giant, has said its underlying business remains robust despite reporting a 46 per cent drop in earnings after the grounding of Boeing’s 737 Max aeroplane and amid Brexit customer caution.

The German-owned group saw underlying earnings slump to €100.9 million in its third quarter after booking costs of €144m from the 737 Max woes, while trading is also being hit by the weak pound and Brexit uncertainty.

Tui now expects costs for the aircraft issue of around €300m for the full year, while analysts said its overall outlook would be a relief for investors.

It said it expects to deliver a “solid performance” this year but, as expected, it won’t match last year’s and the Boeing grounding is a factor.

READ MORE: Tui earnings down 46% after Boeing grounding

It comes after Boeing grounded the 737 Max following the Ethiopian Airlines crash in March which killed 157 people, months after the same model was involved in the Lion Air crash in Indonesia in which 189 died.

Tui said trading continued to be affected by Brexit uncertainty and a “knock-on” effect from last summer’s fair weather as holidaymakers leave it later to book their trips on hopes for summer sun at home.

It said: “We saw delayed customer bookings driven by the summer 2018 heatwave, the continued Brexit uncertainty and considerable aviation overcapacity to Spanish destinations continued in the third quarter.”

Fritz Joussen, Tui chief executive, said for British holidaymakers the recent plunge in the pound on no-deal Brexit worries has effectively pushed up prices by another 4%.

He said: “It’s not a disaster, but it’s not little.”

READ MORE: Tui warns of £172m hit over grounding of Boeing 737 Max

It comes after prices were sent soaring due to the weaker pound after the Brexit vote in 2016. Thomas Cook is already in talks over a rescue deal after suffering mounting debts.

Tui bookings for the summer are down 1% year-on-year, although it said this marked an improvement since the first half, when they fell 3%.

Tui said it had secured replacement aircraft leases to the end of the summer 2019 programme to cope with the 737 plane issues. The group has warned on profits twice this year, blaming one on the UK market and another on the Boeing groundings.

There was no further expected profit pain in its latest report as it stuck to previous guidance for full-year underlying earnings to fall by up to 26% on last year’s €1.77 billion.

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It wants to revamp its tour operating division - which includes its airline - as more of an online platform rather than a traditional tour operator business.

It is also aiming to focus more heavily on emerging markets across Asia and Latin America.

Mr Joussen said: “Despite the challenging environment in 2019 to date, our underlying business remains robust, and we expect to deliver a solid performance in 2019, which, however, will not match the prior year’s result, as expected due to the grounding of the 737 Max.” Shares lifted as much as 3% on the news.

Graham Spooner, analyst at the Share Centre, said the environment “continues to be difficult with weak demand and customers delaying booking holidays”.

He said: “Investors will be relieved that guidance for the year remains unchanged and this has been reflected in a 3% rise in the shares in early trading.

“Progress has been made with some of its strategic initiatives which include growing the hotel and cruise business, increasing its online presence and further stretching into emerging markets in order to diversify from its main European market.”

David Madden, analyst at CMC Markets UK, said Tui “seems to be over the worst of the recent uncertainty, and that might help put a floor under the share price”.