Thomas Cook Warns Holiday Market 'Volatile'

Thomas Cook (Xetra: A0MR3W - news) has warned of the impact of terror attacks on summer holiday bookings - just as details emerged of the latest incident in Brussels.

Shares (Berlin: DI6.BE - news) in the travel operator fell more than 4% with Thomson and First Choice owner TUI down nearly 3%..

British Airways owner International Airlines Group slipped too as did low-cost rival Ryanair and cruise ship operator Carnival (LSE: CCL.L - news) . Easyjet (Other OTC: EJTTF - news) recovered to finish marginally higher after initially falling.

It (Other OTC: ITGL - news) came as Thomas Cook reported a slowdown in summer bookings, blaming volatility in key markets because of security concerns.

The group, which earlier this month cancelled its summer programme for the Egyptian resort of Sharm el Sheikh until the end of October following the downing of a Russian passenger plane last year, said customers were "postponing" making bookings.

It said summer bookings were 40% sold overall - 2% down on the same time last year - following terror attacks in Tunisia, Turkey and in Paris but it remained confident that demand would pick up.

Thomas Cook added that it had endured - but planned for - a shift in demand away from destinations such as Turkey which has been hit by a number of bombings - the latest in Istanbul last Saturday .

In its trading statement ahead of the company's annual results - released just moments before reports of explosions at Zaventem Airport (Shanghai: 600463.SS - news) in Brussels - it said customers were choosing Spain and long haul destinations such as the US and Cuba to try and escape any risks.

"We have been able to accommodate the increased demand for Western Mediterranean and long haul destinations at higher average selling prices and margins, while mitigating the impact of reduced demand for Turkey," the statement said.

While it reported a drop in bookings from the UK, it said customers were paying 4% more, on average, for a package holiday.

Chief executive, Peter Fankhauser, said: "Thomas Cook continues to operate in a volatile market environment. We know that customers want a summer holiday but we can see that some are leaving it later to book this year as they consider their options.

"Against this backdrop I remain confident that we are doing all the right things as a business. It's clear also that customers value packaged travel more than ever and feel safer in our hands.

"The early actions we took to move flights away from Turkey, Tunisia and Egypt have positioned us well for increased customer demand to resorts in the Western Mediterranean, with strong sales to the Canaries, Balearics and the Spanish mainland in recent weeks."

He added: "I am confident that, in spite of the current market conditions, the actions we are taking to implement our strategy will continue to deliver improved results (Other OTC: UBGXF - news) ."