German Tourism Giant TUI Seals 1.8 Bln Euro State Loan

Tourism giant TUI on Wednesday said it signed an agreement for a 1.8 billion euro loan from the German government to help keep it afloat as the coronavirus batters the travel industry.

The bridging loan equivalent to $1.99 billion will be issued through German public lender KfW and be used to bolster TUI's credit line.

"KfW and TUI AG confirm the signing of the state aid bridging loan for 1.8 billion euros," the group said in a statement.

It is one of the biggest examples yet of German companies making use of a huge government rescue package aimed at cushioning the impact of the pandemic on Europe's top economy.

Global lockdowns to stem the spread of the virus have paralysed holiday travel, forcing TUI's hotels, flights and cruise ships to stay empty.

"We must bridge this unprecedented global situation," CEO Fritz Joussen, recalling that TUI had started 2020 "with extremely strong bookings" before the virus struck.

"We are now preparing intensively for when our operations can resume after the coronavirus crisis and firmly believe, people will continue to want to travel and explore other countries and cultures in the future," he added.

TUI had earlier said that the state loan would be used to increase the group's credit line with its banks, giving it access "to financial resources and credit lines totalling 3.1 billion".

The German government has promised "unlimited" credit to help companies weather the coronavirus storm.