Thomas Cook cautious for 2017 despite 'solid' start to new year

Travel giant Thomas Cook has cheered a "solid" start to its new year, but said it remains cautious for 2017 and revealed a blow from intense competition to popular Spanish island resorts.

The group said underlying operating losses improved by 2% on a like-for-like basis to £49 million in its typically quieter quarter to the end of December.

It said it was seeing strong demand for holidays to Greece, with bookings up 40% as it has boosted its offering to the country as part on a switch away from Turkey and Egypt after political instability and terrorist attacks.

But the group said UK bookings for this year's key summer season were largely flat - up 1% overall - as it comes under pressure from rivals in the Spanish island market.

Peter Fankhauser, chief executive of Thomas Cook, said: "A combination of hotel price inflation and increased air capacity has intensified competition for the Spanish islands."

He said the group would not be drawn into a price war and had "taken a deliberate decision to focus on higher margin, quality holidays".

While the group had put in a "solid performance" overall in the first quarter, he said Thomas Cook remains "cautious about the rest of the year, given the uncertain political and economic outlook".