Volcano effect hurts Cook but Holidaybreak escapes the ash

The company is seeking compensation for the "unprecedented" disruption, with the ash cloud closing most of European air space for five days.

TUI Travel and budget airline easyJet have already revealed combined costs of 160m.

In contrast, specialist holiday firm Holidaybreak said the ash impact would not be material to its overall financial performance.

The company, which offers short breaks within the UK and Europe, is continuing to assess the potential impact of the volcano.

The group said: "Our mix of businesses means that we have minimal exposure to air travel, which principally prevails in our adventure travel businesses."

Holidaybreak's hotel breaks business in York saw sales slide three per cent in the six months to March 31 as heavy snowfall and threatened rail strikes hit its performance.

The company posted a pre-tax loss of 17.7m before items over the half year, compared with a re-stated loss of 18.1m last year. The first half is the quieter, loss-making period for the group.

Thomas Cook said it is working with the Government and relevant national and international bodies to put in place measures to ensure such a blanket ban is "not needlessly imposed again".

Despite the temporary impact of the volcano on bookings, chief

executive Manny Fontenla-Novoa said he was pleased with summer bookings so far with holidaymakers proving reluctant to give up their summer break.

The tour operator said UK summer holiday sales were

showing "significant improvement", with bookings up five per cent in the last four weeks and ahead of planned capacity.

Average selling prices have jumped 11 per cent above last year in recent weeks and the firm expects prices to go higher still as Thomas Cook gives away fewer holidays in the discounted 'lates' market.

The tour operator, which has cut capacity to meet lower demand for holidays during the downturn, said underlying revenues were down seven per cent to 3.3bn in the seasonally weaker six months to March 31.

The group's operating losses rose 17m to 130m due to capacity cuts as well as the impact of the weaker pound.