TUI says 737 MAX grounding continues to drag on profit

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LONDON (Reuters) – European holiday company TUI (L:) said it was expecting the grounding of the Boeing (N:) 737 MAX aircraft to cost it an additional 220 million euros to 245 million euros over its 2020 financial year, as the U.S. planemaker’s woes continue to drag on profit.

Reporting first quarter results on Tuesday, TUI said that it was able to partly offset the cost of the grounding of the aircraft by strong demand for its holidays and flights, and a “certain level” of compensation from Boeing.

The company said for the 12 months ended Sept. 30, it expected underlying core earnings (EBIT) to be in the range of 850 million euros to 1,050 million euros, compared to the 893 million euros it reported in the previous period.

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