First Choice Holidays said conditions had been tough over recent months, with bird flu scares, the World Cup, terrorist alerts and the hot UK summer adding to a drop in sales.

The tour operator said that compared with last summer short and medium-haul sales fell 9% and 3% respectively, while long-haul sales increased 45%.

In its pre-close trading statement First Choice said it due to anticipated tougher market conditions ahead, it planned to slash capacity on its short and medium-haul winter holiday ranges by 10%. The company also said the move was part of its strategy to focus on its more lucrative and sustainable long-haul business.

Despite the mixed results, First Choice reassured investors that it was on target to deliver strong profits growth for its current financial year, which ends on 31 October.

By Kerstin Kühn

E-mail your comments to Kerstin Kühn here.

Get your copy of Caterer and Hotelkeeper every week - click here to subscribe and save 25%.