European tour operator Thomas Cook Group has launched a "fundamental strategic and operational review" of its UK business as it continues to be hit by difficult trading conditions.

In a 12 July trading update, the company said the profitability of its UK business was continuing to be hit by the country's economic situation, which had squeezed consumer spending and affected purchases of foreign holidays.

Wider afield, its operations have been hit by the continued unrest in the Middle East and North Africa, the impact of which would be "substantially higher than previously estimated". Its French business in particular has been hit by the unsettled political situation in North Africa, with an impact on business to Egypt, Tunisia and Morocco.

Its central Europe, northern Europe and German airlines businesses are all continuing to perform well.

However, these brighter aspects could not prevent its third quarter results - currently being finalised - coming in lower than expectations. Overall, its full-year underlying operating profit is likely to be around £320 million ($506 million), some £42 million below the equivalent 2010 result, it warned.

A Thomas Cook spokesman said it was too early to say what the implications of the review might be for the company's in-house carrier Thomas Cook Airlines. It was not yet known when the review will conclude.

Thomas Cook Airlines is the UK's second-largest leisure airline, serving some 80 destinations worldwide from 21 UK airports with a 41-strong fleet consisting of a mix of Airbus A320/321s, A330s, Boeing 757s and 767s.

Source: Air Transport Intelligence news