City awaits news of terror impact on travel

Thomas Cook and TUI are  both due to report this weekThomas Cook and TUI are  both due to report this week
Thomas Cook and TUI are both due to report this week
The City will study the effect of recent terror attacks on holiday firms Thomas Cook and TUI.

Thomas Cook will lay bare the impact of recent terrorist attacks on its financial performance when it updates the market on Thursday.

The group may have seen bookings come under pressure, with analysts expecting consumer confidence in the holiday sector to have taken a knock in the wake of the recent atrocities in Paris and Egypt.

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The decision to join rival holiday operator TUI and scrap its Summer 2016 programme to Tunisia also looks set to have hampered progress.

It comes after Thomas Cook cancelled its flights and holiday programme to the popular Egyptian tourist destination of Sharm el Sheikh until March 23, following the Russian airliner crash.

There is also mounting evidence that the Zika virus could be having a damaging impact on customer appetite for holidaying in the Caribbean, after Jamaica announced it had been infected by the virus.

Analyst Will Wallis at Numis said the spin-out from the terrorist attacks and the Zika virus could see a drive towards more people wanting to holiday in the Mediterranean.

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But he added: “This poses logistical problems for Thomas Cook which may have difficulty in getting access to sufficient accommodation at some popular resorts.”

The consensus forecasts for Thomas Cook’s full-year earnings for 2016 are expected to range between £199m to £232m.

The group posted its first annual bottom line profit for five years in November 2015, despite a £130m sales hit from the Tunisian beach and hotel terrorist attacks in June.

EasyJet revealed last month that its sales were hit as some passengers stayed away following the terrorist attacks, which left revenues per seat 3.7% lower over its first quarter to December 31.

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Thomson and First Choice owner TUI is expected to nurse further blows to its finances in the wake of terror attacks across the globe when it reports to the market on Tuesday.

The travel giant revealed at the end of last year it had taken a h52m (£37.6m) hit from the Tunisia attack in June and cut its guidance for the year ahead after cancelling all flights to Sharm el-Sheikh in Egypt following the terrorist bombing of a Russian airliner last month.

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