Turmoil hits Thomas Cook profits

The company said its profit margins in the UK were being hit as it kept its prices competitive to attract cautious consumers, despite rising oil costs which are making it more expensive to fly.

The turmoil in North Africa and the Middle East had also impacted bookings to popular tourist destinations in the region such as Tunisia, Egypt and Morocco.

For the first three quarters of its financial year, operating profits are about £40m lower than a year ago. It now expects full-year profits of around £320m whereas previously the City had expected a figure in the region of £380m. Average UK selling prices for the summer are up just 4 per cent as customers opt for better value all-inclusive deals, such as packages that provide food.