Thomas Cook to be hit by £20m swine flu bill

Swine flu will cost Thomas Cook £20 million this year, the holiday company's chief executive Manny Fontenla-Novoa predicted today.

The package tours operator has already faced a £12.6 million bill from the virus for the six months to June, as it was forced to fly some customers back from Mexico early and offer refunds.

Now Thomas Cook says that it has sold a smaller proportion of its holidays to long-haul destinations than last year as travellers shun Cancun's resorts. The outbreak's impact has been worse than initially thought, with German holidaymakers especially being put off travelling to Mallorca, Fontenla-Novoa said.

It came as Thomas Cook abandoned its internal profit forecasts for 2010 because of the recession. The £480 million target for operating profits was set in November 2007 after its merger with MyTravel.

July and August's miserable weather has been a rare ray of sunshine. "The rain is good news for next summer. People who decide to holiday in Britain will remember the weather they endured and be desperate to go overseas the following year," Fontenla-Novoa said.

In the three months to June, headline operating profits rose 39.5% to £61.4 million.