Holiday giant TUI has reached an agreement with various partners on a further financial rescue package of €1.8 billion.

The deal includes the German Economic Support Fund (WSF), KfW Entwicklungsbank (KfW), commercial banks and the company’s largest single shareholder Unifirm.

TUI said it was taking further precautions in view of the rising number of infections since autumn, strict travel restrictions in many countries and the resulting shorter booking times of customers.

The financial package is intended to ensure that the company can bridge the gap if the pandemic persists in 2021.

Following the first reports of vaccine successes, TUI added it expects the pandemic situation to improve in the course of the first half of 2021, leading to a greater return of holiday travel.

Fritz Joussen, chief executive of TUI, explained: “Before the Covid-19 pandemic, TUI was a very healthy company.

“The market is intact; the demand is there.

“But we have not been able to generate any significant revenues since March.

“Our integrated business model allows us to react very flexibly to short-term changes in the pandemic situation, just as we successfully ramped up our travel programme for a few weeks in July after the first wave.

“People want to travel; tourism remains a growth industry and an important sector for stabilising the southern euro area.”

The package consists of silent participations of the WSF, a further credit line of the KfW, guarantees and a capital increase with subscription rights, which is to be resolved at an extraordinary general meeting of TUI in January.

The Mordashov family, owners of Unifirm, have made a long-term strategic investment in TUI and has agreed to participate in the capital increase with its company.

Joussen added: “The financial package provides the security to look consistently ahead and to prepare the group strategically and structurally for the time after the pandemic.

“With these measures, the group is securing liquidity for a continuing pandemic in 2021, while at the same time improving our balance sheet structures in the long term.

“The overall package of different financing from various partners shows the broad confidence of all parties involved in the future of tourism and the TUI Group”.

Including the additionally agreed financial package, TUI AG had financial resources and credit facilities of €2.5 billion as of November 30th.

Earlier in the year, TUI Group secured €3 billion in funding in two separate tranches from the German government.