TUI, Pathfinder Ventures, Lufthansa - The travel market is back - where are the share prices?

TUI - With major Russian shareholder into an uncertain future

Russian money is invested to a large extent in the West. Whether it is soccer clubs, hotels, real estate or industrial holdings, investors from the East can be found everywhere. This is understandable because Western investments are not only beautiful, they usually increase in value and please the investor. But now there are painful sanctions, and with these, the West wants to hit the Russian economy. But in many cases, things are going differently.

The oligarchs associated with Russian President Vladimir Putin, in particular, are a target in this economic war. Numerous European companies are also affected, including the German TUI. This is because the family of oligarch Alexei Mordashov holds around 30% of the shares in the Hanover-based travel group. The legal consequences of the sanction affect the Company itself because the Company is not allowed to do anything that gives the sanctioned shareholder any advantages. As a result, all internal activities at TUI have to be reviewed several times, a balancing act for the Company's compliance department and an imposition for all other shareholders who have always stood by TUI.

It is not yet known how the travel group now intends to deal with its friendly majority shareholder in the long term. Operationally, things should gradually improve, with bookings for the important summer season picking up significantly and, since the beginning of February, have even been above the level of the pre-crisis weeks in 2019, according to the German Travel Association (DRV). TUI expects a "perfect" vacation season for Mallorca in the first summer without Corona conditions. After a repeated emergency capital increase at EUR 2.65, the share price is heading downwards again. A new all-time low of EUR 1.66 was recently reached. The share remains highly speculative, and the massive mountain of debt has long since surpassed the market capitalization. Continue to watch only!

Pathfinder Venture - New concepts for the post-pandemic world

An interesting vacation investment can be found in Canada and Frankfurt on the price list, as campground operator Pathfinder Ventures is in the process of occupying an entire niche market with new travel concepts. The historically grown market for camping and RVs experienced a veritable explosion in and after the Corona pandemic. Everything had to be digitized as quickly as possible and set up to meet the needs of a new form of family vacation. Digital booking platforms, modern reservation systems and entertainment offerings for young and old were installed virtually overnight at historically grown sites. Those who wanted to travel in 2020 and 2021 could only do so with months of preparation.

Pathfinder is developing a network of premier, upscale, family-friendly RV parks and campgrounds under the name "Pathfinder Camp Resorts". Currently, the Company has three camp resorts in British Columbia. Operationally, management is focused on consolidating the particularly fragile market and expanding its inventory of rental sites and mobile homes. In doing so, it is fully targeting the leisure needs of Canadians and long-distance travellers who want to enjoy blanketed nature and privacy in the vastness of North America. Since the beginning of the Corona pandemic alone, the camping tourism market has been growing at rates in excess of the 20% mark. So there is still a lot of potential here because the demand for peace and unspoiled nature has become much higher, not least due to the warlike activities in Europe. Many Europeans are looking for attractive distant destinations to escape the crisis situation in Europe, at least temporarily.

In the medium term, therefore, it can be expected that both domestic and intercontinental tourism in Canada will continue to grow. The share of camping in North America is not yet as high as in Europe, with around 11.5 million people from Germany indicating that they favour camping as a vacation in 2021. For the still young Pathfinder Ventures, this is a found area for good ideas in the accommodation and leisure sector. Because of the high investments, a planned loss was still made in the first quarter, but the signs continue to point to growth. The microcap is valued at just under EUR 4 million.

Lufthansa - First capacity cuts, now sheer chaos

Anyone who boards a Lufthansa flight at the moment gets to see the whole drama of flying, live. Considerable delays, postponed take-offs and cancellations at short notice result when an airline sells a lot of flights on the Internet - indeed, aircraft are significantly overbooked - and then fails due to its own or third-party logistics at the airport.

You will hear the details if you ask the people on the ground. First, far too many people were cut from all airlines and airport staff due to the pandemic. The urgent need to hire new people is causing significant problems because the "former employees" have looked for a new job or are no longer willing to compete at 2019 rates today. That leads to dramatic understaffing in all positions, extreme stress and absences among existing staff, and ultimately a high level of uncertainty for passengers as to whether they can really fly at the booked time or whether they will arrive on time with their baggage.

If these conditions cannot be improved as quickly as possible, the German benchmark company in air traffic is threatened with losing its regular customers. Air France-KLM have similar problems, but there are also enough positive counterexamples that have found better solutions in the pandemic. The whole plight of the crane line can be seen in its share price. Minus 40% in the past 36 months and more than EUR 1 billion of necessary government bailout. Investors do not know whether the share price is too low or the final crash landing is yet to come. However, if the EUR 5.50 mark holds, the sky would be blue again for further climbs towards EUR 11 if the EUR 8.50 line is crossed.

The Ukraine crisis keeps the world on tenterhooks and stirs up bitterness. The almost daily increase in the price of energy is producing economic fears for the future. In this environment, travel and transport companies have a hard time despite numerous catch-up effects. The small Pathfinder Ventures is in a highly dynamic field and is growing prosperously.