UK tour operator sees strong Turkey demand

One of the world's largest U.K.-based travel agencies, Thomas Cook, reported an 8 percent rise in full year earnings, helped by a turnaround of its German airline Condor and improved customer demand, adding that bookings for Turkey and Egypt in summer 2018 were already very strong.

The tour operator said on Wednesday underlying earnings before interest and tax (EBIT) was 330 million pounds ($437.6 million) in 2016-17, a little higher than an analyst consensus of 327 million pounds.

The company said that while bookings for next summer were at an early stage, better demand for trips to Turkey and Egypt in 2018 should help alleviate some of the margin pressure.

"My experience tells me that (the Spanish market) is balancing out," Chief Executive Peter Fankhauser told reporters on Wednesday.

"As soon as Turkey, Egypt and the eastern Mediterranean destinations (have) increased demand, the Spanish hoteliers will see that they will have to adapt their prices to level it out."

Fankhauser said that 42 percent of holidays in summer 2017 were to Spain, but that should go down, with some capacity redirected into Egypt.

Underlying earnings before interest and tax (EBIT) were 330 million pounds in 2016-17, Thomas Cook said, a little ahead of an analyst consensus of 327 million pounds.

The group said it was "well positioned" to achieve current market expectations for 2018, given strong early bookings for next summer.

One positive element was the performance of the group's airline business, which improved profits by 24 million pounds in the year, helped by a recovery for German carrier Condor.

Fankhauser said that the performance was especially encouraging in a year when Air Berlin, Monarch and Alitalia have all gone into administration, partly as a result of the intense competition in the industry.