Travel shares fall on recession fears

Shares in airlines and travel operators remained sharply lower yesterday with investors uncertain after two leading executives warned the recession may damage tourism for the next two years.Despite reassurances this morning from Thomas Cook that current trading remained in line with its previous update in February - when it said the winter period had been ‘robust’ - the group and its peers remained lower in the wake of comments from executives that bookings were down and the situation for firms was difficult.

Shares fell initially after reports on Bloomberg that executives from BA and Thomas Cook had warned of an even more difficult 2010 to come, with very weak trends seen for the industry, when they gave speeches at Berlin’s International Tourism Fair.

In reaction Thomas Cook said in a statement that it noted the comments in the press and the share price fall, but it insisted trading remained in line with its previous comments.

It said: ‘Thomas Cook notes that the performance of the group overall continues to be in line with the performance outlined at the time of releasing its interim management statement.

‘Whilst the market continues to be challenging, the board remains confident in achieving its expectations for the year as a whole and believes that the group remains well positioned for the future.’

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Analysts at Citi added that the comments at the conference were not new, and were in fact expected given the economic background. It added such factors had already been factored in to its recommendation.
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