Holiday bookings have become more volatile since 9/11

The Crawley-based company said profits for the year to 30 October would be "in line with expectations," thanks in part to a late surge in summer bookings after the end of the Iraqi conflict in mid-March.

First Choice said it had also minimised the impact of the war by reducing capacity in April and May, when jittery consumers were reluctant to make firm bookings.

It added that tour operators had been forced to become more flexible to cope with sudden peaks and troughs in demand in the wake of the 11 September attacks.

"Since 9/11, the industry has witnessed a significant change in the timing of mainstream holiday bookings," the company said in a statement.

"Demand, particularly for peak periods, remains high, but increased uncertainties in the world mean fewer customers are prepared to commit early in the booking period."

It said the 2003 summer season had been one of its best ever, and described demand for winter bookings so far as "strong."

First Choice has weathered the travel industry turmoil better than some of its competitors by increasing its focus on high-margin niche holidays based around activities such as sailing, trekking and golfing.

In the six months to April, the firm narrowed its losses to �44.1m before goodwill, down from �49.5m one year earlier.

The company will report full year results on 9 December.