Travel agency Thomas Cook has said that cases of swine flu have cost the company £12.6 million in lost revenue as customers cancelled trips to Mexico and other destinations.

The firm added that the impact of the worldwide pandemic had been “more significant than expected”, but said that the strength of its brand in the UK and abroad had enabled it to remain resilient in the face of “challenging economic and trading conditions”.

Thomas Cook lost £49.5 million between September 2008 and June 2009, due in part to expenses from its merger with My Travel.

The company said that the proportion of holidays sold was similar to last year, but noted a rise in last-minute deals. However, sales of holidays to long-haul destinations have gone down as customers shun the Mexican resort of Cancun because of swine-flu outbreaks in the region.

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Britons taking out package holidays will have to pay an extra £1.50 levy on the cost of their trip, to help meet the potential cost of tour operators going under.

The Air Travel Organiser’s Licence protection scheme, which currently costs £1 per passenger, will now increase to £2.50. The scheme is designed to protect holidaymakers in case of the financial collapse of their tour operator.

Passengers who book an airline ticket only will not be covered by the scheme.

Thousands of holidaymakers made claims following the collapse of the XL Leisure Group last year, and the protection scheme has been in financial difficulty ever since. A number of smaller tour companies have also collapsed in the last year.

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Travellers who contract swine flu should be covered for any resulting losses by their insurance policy, the Association of British Insurers (ABI) has said.

Customers who are forced to cancel their holiday or seek medical treatment abroad because of swine flu will be able to claim compensation, as long as the disease was not contracted before the policy was taken out.

However, travelling against official advice could jeopardise travel insurance policies. When deciding whether to pay out on a claim, insurers would take into account doctors’ notes advising those affected by the flu virus against travelling.

More than 100,000 new cases of the H1N1 virus a day are expected by the end of the summer in the UK, though most are mild.

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Following the pound’s recent comeback against the euro, British holidaymakers travelling to Europe this summer are in for more good news, as fuel prices have plummeted across the continent by up to 12% for unleaded petrol and as much as 31% for diesel, according to a recent Post Office survey.

Switzerland was cheapest for unleaded petrol at just 91p a litre. However, driving in Austria and Spain can work out even cheaper if you opt for a diesel-powered hire car. The cost of diesel is just 83p a litre in Austria and 87p a litre in Spain. Unleaded petrol in all three countries now costs around 34% less than in the Netherlands, the most expensive of 12 destinations surveyed by the Post Office.

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Airlines are ignoring EU laws by automatically adding travel insurance when customers book flights, a watchdog has found.

According to a new report by the consumer magazine Which? Holiday, four airlines are ignoring an EU directive issued last November which forbids them from automatically adding extras such as insurance at the time of booking.

Of 11 sites checked by researchers, over a third had flouted the rules. Easyjet, Jet2 and Monarch all automatically add travel insurance policies at the time of booking, costing between £7 and £10.49 per passenger, while Air Berlin automatically adds cancellation insurance for flights that return the same day that they fly out, costing £10.63. To opt out of the insurance consumers must tick a box.

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Tour operator Thomas Cook has assured its customers that it will not be affected by news that its parent company has declared itself insolvent.

Arcandor, which also owned the German department store chain Karstadt and the mail order business Primondo, filed for insolvency after the German government refused its request for an emergency bail-out yesterday.

Manny Fontenla-Novoa, chief executive of Thomas Cook Group, expressed sadness at the news of Arcandor’s collapse, but said that Thomas Cook’s financial arrangements had been kept independent of its parent company.

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A tour operator which specialises in holidays to Turkey has gone bust, leaving around 1,300 holidaymakers stranded abroad.

ScotTravel Holidays Limited, based in North Lanarkshire, is the fifteenth British holiday firm to cease trading this year. The company blamed the recession on its demise.

The Civil Aviation Authority (CAA) said last night that it would be making arrangements to bring ATOL protected customers home at the end of their holiday, although inbound flight changes may be necessary. Further information will be made on the organisation’s website when it is available. The CAA has advised all customers at ScotTravel with upcoming holidays to stay at home as all holidays have been cancelled.

However, unaware that ScotTravel is no longer trading, a number of customers had already travelled to Glasgow airport this morning only to be told their holidays had been cancelled.

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Disorganised holidaymakers could be missing out on the best deals in travel insurance because they book it at the last minute, according to the AA.

Research by the insurer found that over half of respondents purchased their single-trip travel insurance within three days of going abroad, with some booking insurance within hours of their flight.

However, customers who book their travel insurance at the last minute could be missing out on some of the best deals, says Christian Young, director of AA Travel Insurance.

“People who leave things to the last minute are inevitably going to have less time to be well organised and insurance tends to be back of mind until it’s too late,” he explained.

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The disappearance of Madeleine McCann from an Algarve holiday resort in 2007 is still having an adverse effect on Portugal’s tourism industry, according to tour operator Thomas Cook.

The company, which is the second largest tour operator in Europe after the German-owned TUI, revealed yesterday that bookings for package holidays to Portugal this summer are down 30% on last year. Thomas Cook has also seen a 20% drop in holiday bookings to Spain and a 35% decrease in Italian holidays.

Whilst holiday bookings for the company have decreased in destinations across Europe thanks to the weakness of the pound against the Euro as well as increasing unemployment in Britain, the disappearance of the then three-year-old Madeleine from the Ocean Club in Praia da Luz in May 2007 is still an important factor for families deciding on a destination.

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Holidaymakers who purchase travel insurance from a high-street travel agent could pay up to six times more than those who take out a policy online.

As more people look to snap up last-minute holiday deals this summer, consumers are warned not to accept travel insurance offered by a travel agent in a rush without having shopped around first.

Statistics from the Association of British Travel Agents reveal that 40% of travel insurance policies were bought through agents last year, suggesting that many consumers do not spend time shopping around before opting for a policy.

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