According to Thomas Cook, the UK tour specialist, the price that British travelers need to pay for their holidays is likely to increase by 7% during next summer. This is largely due to the shooting up of oil prices and the weakening of the position of pound when compared to euro.
Manny Fontenla-Novoa, the chief executive of the group said that the summer holiday packages for 2009 released already clearly reflect the oil price rises. Over and above, he is expecting that on an average, the prices of oil shall remain 7% above last year.
According to Fontenla-Novoa, the rise of jet fuel costs accounts for increase in the airfares. Over and above, he too indicates that the hike of costs of accommodation in the Eurozone is also due to a weakened pound. Notably, Thomas Cook accommodation costs generally amount to four times their fuel costs.
On the other hand, Thomas Cook has plans to reduce its capacity in the summer of 2009 by about 5%, Fontenla-Novoa noted, "For the first time in a long time supply is maybe less than demand."
He too said, "I'm delighted with our performance over the winter and we are in a very good position for the summer season. I remain confident that we will achieve our goals for this year. For the longer term, our strategy is on track, our merger synergies are coming through, and we continue to target £480m of operating profit in 2009/10."
