The newly formed Thomas Cook Group has announced its financial performance for 2007 is currently in line with expectations despite pressures on the UK market.

In its first interim management statement the group said following a 5% reduction in UK capacity for summer 2007 and a 1% increase in selling prices, there has been an improvement in trading on the previous summer.

However, the higher prices have still not allowed a full financial recovery due to the increased cost of fuel while the additional euro 60 million customers are paying in Air Passenger Duty has acted as a brake on prices.

Capacity cuts in the UK for winter 2007/08 are expected to be around 5%, due to the scrapping of unprofitable programmes. Cumulative bookings for the season so far are 2% ahead of last year. In the last four weeks this has risen 9%.

These figures have allowed the group to sell 26% of its current winter capacity, which is 3% more than sold this time last year although average selling prices are down 1%.

The group said early indications for summer 2008 are good, although capacity, less profitable programmes and optimal yield management are still under review.