Flat bookings, unrest in the Middle East and North Africa and a late Easter mean tour operator Thomas Cook’s UK business is heading for a worse performance than last year after it reported wider first-half losses.

Europe’s second biggest travel firm, which has significant operations in Bradford, said underlying losses in its UK operations increased 37 per cent to £158.7 million in the six months to March 31 as it discounted holidays amid weak demand from consumers.

Conditions in the UK remain tough, as summer bookings are flat and the group’s margins are being squeezed as it struggles to pass on a 20 per cent increase in jet fuel costs.

The firm warned it would be forced to raise prices by a further two three per cent if fuel rises continued.

The performance of the UK business pushed the group’s operating losses up 36 per cent to £165.8 million in the period.

Thomas Cook also took a £22 million hit from the uprisings in the Middle East and North Africa (MENA), which caused holidaymakers to cancel bookings. First-half profits were also £15 million lower because Easter fell late.

Thomas Cook is carrying out a review of its UK business, which saw it make 500 redundancies last year, mainly at its head office in Peterborough. The company, which has 19,000 employees in the UK and Ireland, said it is considering cutting its UK airline fleet.

Manny Fontenla-Novoa, chief executive, said: “We have responded to the challenges of political unrest in the Middle East and North Africa and the weak UK consumer environment by redirecting our flying programme, cutting costs and continue to focus on our strategic priorities.

“As expected, first half trading was impacted by the timing of Easter and the unrest in the MENA region but despite the difficult UK trading environment in the first half, we have contained the seasonal loss and kept our focus on cash flow.

“Our Continental and Northern European businesses have performed well.”

  • Read the full story in Thursday's T&A