Tour operator Thomas Cook has said it will cut capacity from the UK as “fragile consumer sentiment” continues to slow trade.

While bookings are ahead of last year in Northern Europe, principally Germany, a “weaker picture” in the UK has seen the operator take a “prudent approach to capacity”.

Political unrest in Egypt and Tunisia cost Thomas Cook about £20 million, with some 150,000 cancellations added to the cost of repatriating tourists.

However, restrictions on travel were substantially eased across the majority of source markets at the end of February and flights have now resumed to both destinations from the UK, Germany, the Netherlands, France and Belgium.

Northern Europe will begin flying again to Egypt in April and to Tunisia at the end of May. 

Commenting on recent trading Thomas Cook chief executive, Manny Fontenla-Novoa, said: “Overall, the business is performing well, given the disruption caused by the unrest in Egypt and Tunisia.”

Fuel prices have also risen by approximately 20 per cent since the start of the calendar year, Thomas Coo said, forcing the introduction of fuel supplements in some markets.

Co-operative

On March 6th the Competition Commission agreed examine a proposed merger between Thomas Cook’s UK high street travel agents and the Co-operative.

The Competition Commission now has 24 weeks, until mid-August, to reach its conclusion. 

“We continue to work closely with the authorities to reach an expedited clearance,” added a Thomas Cook statement.

“We anticipate receiving competition clearance and completing our joint venture with Intourist in Russia in May, following a later than expected filing with the Competition authorities.”

Thomas Cook will report its interim results for the six months ending March 31st 2011 on May 9th.