The enlarged group has a big share of the package holiday market

It said expensive air travel taxes on holidaymakers hampered its ability to raise prices as much as it would need to offset higher fuel costs.

The comments came as Thomas Cook said cost savings from its �2.8bn MyTravel merger, which will see 2,800 jobs lost, will be higher than originally thought.

In June, the German-owned firm said shop closures may hit 15% of its staff.

"The programme to integrate the former Thomas Cook and MyTravel businesses has continued to make excellent progress in the two months since our interim results," it said.

"We are increasingly confident that the synergies achieved will exceed the 140m euros ($191.2m; �94.8m) predicted in the prospectus for the merger."

Economy of scale

Many tour operators have suffered in recent times as the package holiday market, one of the industry's biggest earning streams, has been hit as more people plan their own holidays themselves through the internet.

This has driven high street travel firms to look for partners to increase market share and cut costs.

The tie up of Thomas Cook - owned by German firm KarstadtQuelle - and MyTravel created Europe's second biggest travel group with a 35% share of the UK package holiday market.