Tui Group plunged to an annual loss of €3.1 billion as Covid-19 travel restrictions grounded operations from March.
Revenue for the year to September 30 fell by 58% from €18.9 billion to less than €8 billion.
The number of holidaymakers carried by the group fell by 62% from 21.1 million in 2019 to 8.1 million as a direct result of Covid travel restrictions.
More than 2 million customers took Tui holidays since operations re-started in mid-June.
But Europe’s largest travel group will only operate 20% of usual capacity this winter as against 40% previously indicated as a result of increasing travel restrictions caused by the rising number of infections “and the associated later booking behaviour of some customers”.
Tui added: “We continue to expect to operate an adjusted capacity of 80% for summer 2021, which will be flexed as we gain more visibility on future imposed travel restrictions.”
The group, which secured an extra €1.8 billion German government bailout earlier this month to bring the total up to €4.8 billion, has raised targeted cost savings by €100 million to €400 million a year until 2023.
“As a result of these measures, we are confident Tui Group will emerge stronger, leaner, more digitalised and more agile, in what is likely to be a much more consolidated market,” the company said.
However, in the short-term Tui cautioned that there is still “considerable uncertainty regarding the likelihood and nature of further lockdowns and travel restrictions over the next few months, the distribution of an effective vaccine and the shape of the economic recovery”.
The board refrained from issuing new guidance for the next financial year under the current circumstances.
Chief executive Fritz Joussen said: “Very rapid cost and liquidity measures, an accelerated realignment and our flexible business model have enabled us to steer the group through the crisis.
“Tui is ready for a speedy and successful resumption of travel activities as soon as the lockdowns are lifted and destinations reopen.
“The prospect of vaccinations from the beginning of the year will significantly increase demand for summer holidays in 2021. We are prepared for a new start after the crisis.”
The decision to further trim winter 2020-21 capacity by 20% “reflects the more extensive local restrictions across our key markets during the first quarter”.
Tui added: “Anecdotally we have observed an immediate uplift in demand when destinations reopen with long-haul destinations such as Jamaica and St Lucia reporting load factors of over 90% on reopening.
“Whilst many of the popular winter destinations as well as long-haul options may at present not be permitted, our integrated model means we are well positioned to resume both medium and long-haul programmes as soon as destinations are reopened again.”
Winter bookings are down 82%, in line with adjusted capacity, compared to normal levels the previous year “as well as reflecting an overall later customer booking pattern in recent months as a result of the short notice changes in travel advice”.
Summer 2021 bookings from the UK are 19% ahead “reflecting the typical earlier booking behaviour for the region”.
However, overall bookings for next summer are down 10% over the same point last year for the 2020 peak season.
The relative change in the overall booking position reflects a slowdown in booking momentum during November as a result of local restrictions across key markets and “particularly strong comparables” in the wake of the Thomas Cook insolvency in September last year.
Tui said: “We expect the later booking behaviour to be less pronounced as local travel restrictions ease, vaccine programmes become available and we return to a more normalised environment for leisure travel – supported by a pick-up in recent bookings following positive vaccine news.
“The integrated nature of our business model means we have a high level of flexibility to adapt our programme as we gain more visibility.
“People’s continuing passion for holidays is evident in external research which identifies holidays as being one of the most missed activities during the C-19 pandemic.”
Tui projects the coming 12 months to be a “year of transition” followed by a return to profitable growth from 2022 onwards.
“The additional financing package agreed strengthens our position and provides us with sufficient liquidity reserves in this volatile market environment, balancing out the presumed travel restrictions until the beginning of the 2021 Summer season,” the company said.
“We are actively streamlining the business through targeted cost cutting, whilst prioritising growth spend on digitalisation initiatives.
“We will be selective in our investment strategy which will be supported by disposals and we will be focussed on asset light structures.
“Our trusted, leading brand with differentiated products is strongly positioned to benefit from the expected market consolidation.
“Our digitalisation transformation, underpinned by cost control, and balance sheet discipline will drive our return to healthy financial metrics and profitable growth.”
The group also gave an upbeat forecast, saying: “The unbroken high level of consumer interest in holidays promises a rapid recovery for the holiday sector if the corona situation eases.
“Tourism will remain a growth industry in the long term. As a safe and reliable form of travel, package tours in particular will play an important role in the resumption of travel.
“The cruise segment is also expected to see a complete resumption of business as soon as vaccines become widely available.
“The restart of cruises in summer 2020 has demonstrated the great interest of customers.
“With strong holiday brands, differentiated products and broad-based distribution in the key European markets, Tui is well positioned to get back on track successfully after the pandemic.”
Tui expects airlines in Europe “are likely” to be permitted to return the Boeing 737 Max to service during the first quarter of 2021.