10:55am UK, Friday May 16, 2008

People are still flocking to book holidays despite fears of a spending squeeze, according to Europe's second-biggest travel firm.

180 holiday family beach emigrate

Many not cutting back on sun

Thomas Cook says demand for summer breaks is very strong - and that for winter vacations in the UK and across Europe "encouraging".

The group was created last year from the tie-up of Arcandor's travel unit and British company MyTravel.

It made a currency-adjusted operating loss of £154.6m in the six months to March 31, compared to a £213.6m loss the year before.

The group said it remains confident it will meet its expecations for the current financial year despite the soaring cost of fuel and the impact of the weaker pound.

Fuel requirements for the remainder of the year are hedged 100% for crude and 90% for jet fuel.

Thomas Cook confirmed it is on track to achieve merger savings in excess of almost £160m by 2008/9, despite the 15% depreciation of sterling against the euro.

It is also continuing to target a £495m operating profit in 2009/10.