TUI, the biggest tourism company in the world, reached a deal with the German government for an additional $1.4 billion (1.2 billion euros) in a stimulus boost that could provide Germany a share of around 9 percent in the group.
The tourism giant, which has already said it would retrench and shut down stores, reported a net loss of $1.7 billion (1.42 billion euros) in the April to June period.
The second funding rescue proves the heavy impact of the pandemic that continues to hammer the economy. The relief package by German public lender KfW is aimed at helping the group operate through the coming winter season.
In a statement Wednesday, the company said an existing loan from KfW will be topped off by 1.05 billion euros, while the German Economic Stabilization Fund will pour in 150 million euros in a bond that can later be transformed into a state-owned share.
TUI previously announced it would slash 8,000 jobs around the world to minimize operating expenditures. The packaged-tour operator's hotel bookings, flights and cruise vessels were badly affected during the peak of global lockdowns.
The Hanover-based group has found it very difficult to reopen for business, as key tourism areas like Spain have seen increases in new virus infections and have had to reimpose COVID restrictions.
According to TUI chief executive officer Fritz Joussen, the company could seek more financial assistance from investors in order to stay afloat, including disposing of some units of the business.
TUI took 23 million people on holiday last year before COVID-19 battered global travel and wiped out the company's sales as TUI burned through around 550 million to 650 million euros each month.
TUI added that its summer reservations and ticket sales have fallen 80 percent so far this year, prompting the group to cut capacity for next year's winter and summer by 40 percent and 20 percent, respectively.
The bailout funds are set to be repaid in 2022, and lending sources said that the company could divest all or portions of its 50 percent ownership in the Spanish hotel chain RUI Hotels & Resorts.
