Travel firms untroubled

Britain's love affair with the summer holiday is expected to shelter travel giants TUI Travel and Thomas Cook from the ravages of the credit crunch as the pair post trading updates this week.

Thomas Cook and TUI were the second and third-largest gainers on the FTSE 100 last Friday, with TUI climbing 21.5 per cent over the week.

The firms, which report third- quarter results on Wednesday and Thursday, were boosted by a Dresdner Kleinwort survey of 200 travel agents, which said the sector was in rude health.

"There was evidence of 2008 bookings remaining strong," said Dresdner analysts. "There are fewer discounts being offered in the late market, consumers are upgrading to long haul and all-inclusive products, and there is a pick-up in 2009 bookings.

"Earnings for next year are not without risk but the third-quarter results should prove a positive catalyst."