Crawley-based tour operator First Choice said trading was in line with expectations despite concern about the outbreak of bird flu in Europe.

Bookings for mainstream short haul holidays were down seven per cent on last summer after holidaymakers were scared by the spread of the deadly H5N1 strain of bird flu in Turkey, which has killed four people in the country.

Demand was hit hardest in January, but a trading statement ahead of the group's annual meeting in London last week said business had improved since then.

Higher sales of more lucrative long haul trips and the decision to raise prices meant revenues were up three per cent from last year.

First Choice, whose brands include Unijet, Falcon and Sovereign, has cut capacity for the summer by five per cent and this contributed to lower sales, with demand for inclusive tour packages falling at a similar rate.

Despite the rise in fuel costs, margins from mainstream holidays were in line with expectations and ahead of last year as two-thirds of trips are now sold directly by the company.

First Choice's activity holiday division increased like-for-like sales by 12 per cent in the winter season, while summer sales were up eight per cent.

Its specialist winter sales, which include destinations in North America and Mexico, were down three per cent and specialist summer sales were down 11 per cent.

At the same time, its European specialist business, which focuses on four and five star hotels, was hit by tough trading conditions in Turkey and Egypt.

"Since the terrorist bombings last summer we have been reducing low season capacity in these markets and offering holidays to alternative destinations in anticipation of tougher trading conditions," the group said.

First Choice reduced winter capacity in the division by 20 per cent, it said, while revenues were down nine per cent on a 16 per cent fall in bookings.

So far the specialist division's summer revenues are down 11 per cent on a 14 per cent fall in bookings.

First Choice, based in London Road, employs more than 14,000 people in 17 different countries. The chief executive is Peter Long.

Wednesday, March 29, 2006