Package holiday operator Tui has achieved its first profit for the key April to June period since before the pandemic, but its full-year accounts will be hit by the cost of last month’s wildfires in Rhodes.

The company said the €25m (£21.6m) wildfire bill included the price of cancelling holidays, compensating customers and flying them home. About 8,000 Tui customers were evacuated from Rhodes, but the company added that 80% of its guests on the Greek island were unaffected.

During the three months to the end of June the tour operator made an underlying pre-tax profit of €169.4m (£146m), almost €197m higher than the same period a year earlier. A 9% increase in passenger numbers to 5.5 million took bookings close to pre-pandemic levels as Tui carried 95% as many passengers as it did in the same quarter in 2019.

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Chief executive Sebastian Ebel said Tui is planning to invest in more package holidays around the Baltics, the Nordics, the Netherlands and Belgium as climate change could force travellers to seek new destinations abroad. In addition, changing weather patterns could lead to a longer travel season.

“We will go into Greece to the middle of November,” Mr Ebel said, adding that Tui could even take bookings “until or after Christmas”.

“It will give us more opportunities for growth.”

Figures from Mastercard show there has been an increase in holiday bookings to Northern countries this year including the Nordics and the Netherlands, although Mr Ebel said the Mediterranean remains Europe’s most popular summer destination. Wildfires and extreme temperatures only dampened demand “temporarily”.

In total more than 20,000 people were evacuated during last month's wildfires in Rhodes and other parts of Greece which one traveller described as “literally like the end of the world”. Rhodes accounted for about 5% of Tui's summer holiday offering this year.

Revenues during the three months to the end of June surged by nearly a fifth to €900m, bolstered by strong demand and higher prices. The company confirmed that it expects total bookings of 12.5 million for the summer season, a 6% increase on last year.

Bookings for the forthcoming winter season are “at a very early stage” but are off to a promising start, Tui said, with the UK most advanced with 33% of available holidays sold. That is a 7% increase on last year.

Net debt at the end of June stood at €2.2 billion, an improvement of €1.1bn on the same period a year earlier. This was driven by the net proceeds of a €1.8bn rights issue in April as well as the group’s own positive free cash flow.

READ MORE: Rhodes wildfires cost Tui €25m as 8,000 customers evacuated

“The sun doesn’t always shine on Tui, but the Anglo-German tour operator has just seen its first profitable third quarter since the pandemic and says it’s on track for a strong summer season,” said Emma-Lou Montgomery of Fidelity Investments.

“Some 5.5m holidaymakers travelled with Tui in the three months to the end of June, helping push group revenue up 19% to €5.3bn, compared to €4.4bn over the same period last year. That’s 11% above pre-pandemic levels.

“The 2023 holiday season hasn’t been without its challenges though, with 8,000 holidaymakers recently evacuated as the wildfires raged across Europe. But sun-seekers are a determined bunch and the drop-off in demand proved to be only a blip, with Tui saying bookings for the last week were up 5% against summer 2022.

“The financial impact of the wildfires on Tui will inevitably last far longer, adding around €25m to Tui’s full year 2023 costs - but the group says business is ‘close to normal’ and earnings are set to be ‘substantially higher overall this year.”

Shares in Tui closed yesterday’s trading in London 3.4% lower, down 19.5p at 562p.