The fall in tourist bookings since 11 September has forced Thomas Cook, Europe's second biggest travel operator, to axe 2,600 jobs – 10 per cent of its workforce.
The German-owned company also said it will close 100 of its 4,000 travel agencies and ground a quarter of its planes in an effort to stave off an expected loss next year.
The company said the job cuts would fall "across the board". Although a spokeswoman admitted it was "likely" this would include the UK, she declined to give further details.
The announcement is a further blow to the travel industry, which saw bookings nearly halve in the month following the attacks on the World Trade Centre and the Pentagon.
Stefan Pichler, the chief executive of Thomas Cook, said new bookings for the winter season had fallen by 12 per cent across the group. "We have no indication that this situation will change in the short term," he said.
Last month the company announced a cost-reduction initiative as part of a larger restructuring programme that aimed to phase out 410 sales administration positions and cut 100 cabin crew jobs at its JMC Airlines subsidiary.
Alan Stewart, the chief executive of Thomas Cook UK, said: "It's very unfortunate that we are having to look at cost reduction measures across the group, but very necessary given the current trading conditions."
Thomas Cook, which was bought by the German company C&N Touristic earlier this year, is offering its 12,500 UK staff the option of taking voluntary redundancy, unpaid leave or switching to part-time work. "What we haven't announced are any enforced redundancies," said the spokeswoman. "But in the leisure sector, clearly one of the biggest costs is staff so we need to reduce the pressure."
Staff were given until 31 October to decide whether to apply for redundancy.
TSSA, the travel industry union, urged Thomas Cook not to rush into any decisions. "Travel companies should be thinking what their staff are worth to the company, not merely their cost on a balance sheet," said a spokeswoman.
While tour operators say demand for holidays has picked up in the past few weeks – Thomas Cook said bookings for skiing holidays were up 10 per cent on this time last year – holidaymakers are proving reluctant to plan ahead.
"What we are experiencing throughout the industry is that customers are not committing themselves for holidays for later this winter and for next summer," said Mr Stewart.
Thomas Cook said UK customers were going for usual October destinations including the Canaries, Turkey, Greece, the Caribbean and Mexico. The effect of the bombing campaign in Afghanistan had put people off going to places such as Egypt, the company said.
Rival tour operators First Choice and Airtours have already slashed staff and capacity. First Choice announces 1,100 job cuts – 10 per cent of its workforce – after winter bookings slumped by 33 per cent and summer bookings by 20 per cent. Airtours, Britain's largest tour operator, is in the process of cutting 2,000 jobs worldwide, including 350 in the UK out of 2,000 worldwide. Thomas Cook insisted it was not cutting the number of holidays it was selling.
The crunch time for tour operators that are considering reducing capacity comes in February, when they must take the final, decision on how many airline seats and hotel rooms they will book for the summer 2002 season. If they over-react now, they run the risk of being unable to meet demand.
Preussag, the biggest European tour group and owner of Thomson Travel, said yesterday that is was standing by its "cautiously optimistic assessment of future market developments". It said bookings across the group had fallen in the "upper single-figure range" but that it would be premature to comment on the likely demand for summer 2002 holidays.
The group, which plans to re-brand itself under the "World of TUI" banner, has managed to avoid cutting any jobs, although it said it adjusted its capacity with third party airlines and was making some "personnel and administrative savings" across the group.Reuse content