Strong bookings help First Choice dismiss price war fears

First Choice has dismissed fears that a price war sparked by unsold holidays could destabilise the travel industry, and yesterday reported strong booking patterns for summer 2002.

The tour operator said it had "just under half a million holidays left to sell" – less than it had a year ago. The group's optimism contrasted starkly with its rivals, which have warned that demand for summer holidays has collapsed.

"The cutbacks that everyone has made leads us to believe supply and demand is broadly balanced for the high season," Peter Long, First Choice's chief executive, said. He added that the group, which distinguishes itself from its mass-market peers by offering more specialist holidays, had seen "strong bookings coming through in April and May", particularly from families.

Last month, MyTravel (formerly Airtours) said booking patterns "across the industry" had changed, with customers refusing to book in the hope of a last-minute bargain. This sparked fears that a price war could break out as tour operators offloaded unsold holidays.

Mr Long reiterated his welcome of last week's decision by the European supreme court overturning a European Commission decision in 1999 to block a merger between First Choice and Airtours, adding he expected Britain's four largest tour operators to consolidate.

First Choice beat expectations to report pre-tax losses before goodwill and exceptional items of £45.7m for the six months to end April, on turnover down 14 per cent to £751.2m. Its shares closed up 6.5p at 115p.