Preussag, the biggest travel firm in Europe, is unlikely to hit the targets it has set for itself for 2001 in the wake of the tourism slump since 11 September.

The German company said earlier this year it would boost operating profits by 20% to 900m euros.

But its chief executive, Michael Frenzel, now believes that is unlikely - although he still believes that the company will beat last year's 747m euros.

To cope with the slump, which has affected aviation and tourism firms across the globe, Preussag is cutting costs to the tune of about 40m euros.

Bookings are down 10% for the winter season compared with last year, Mr Frenzel said.