The collapse of XL Leisure may have been bad news for thousands of stranded holidaymakers, but it has prompted a surge of bookings for Britain’s two biggest tour operators as customers seek out holidays offering consumer protection.

TUI Travel and Thomas Cook today continued to defy the dismal economic environment by reporting robust trading. Both said that XL’s collapse had been beneficial by removing capacity from the market and alerting customers to the perils of travelling without consumer protection.

Peter Long, chief executive of TUI Travel, which owns the Thomson and First Choice brands, said the “XL debacle” had highlighted the dangers of the Government’s failure to insist that flight-only operators should be covered by the same consumer protection as the package holiday firms.

He said: “We have experienced a surge of bookings since the unfortunate collapse of XL and I think that will continue so long as we don’t have a level playing field. Customers trust the big brands and they are migrating to them.”

His comments were echoed by Manny Fontenla-Novoa, the chief executive of Thomas Cook. “In uncertain times people go for trusted brands. We have been around since 1841 and that counts for a lot.”

In a trading update, TUI Travel said its mainstream UK business had enjoyed a 6 per cent increase in sales over the summer on capacity down 13 per cent, pushing the achieved selling prices up by 18 per cent.

Mr Long said the early signs for next summer were positive, despite a 6 per cent increase in brochure prices to cover cost inflation. He predicted that capacity could be cut by a further 15 per cent as the company sought to improve margins further.

Thomas Cook reported a similarly strong summer, with prices on UK bookings up 7 per cent on the back of a 10 per cent capacity cut. It said it had sold 94 per cent of its holidays, the same figure as TUI Travel.

Mr Fontenla-Novoa said he remained positive over next summer’s prospects, predicting that capacity would be cut by about 7 per cent while brochure prices would rise by about 6 per cent to cover fuel and currency costs.

Thomas Cook also announced its withdrawal from talks to merge Condor, its German airline, with TUIfly and Lufthansa's Germanwings. it now expects to retain Condor while cutting the number of aircraft. “We weren’t getting enough financial upside from the deal,” said Mr Fontenla-Novoa.

Recent doubts over the share ownership of Thomas Cook were resolved today as the German retail and tourism group Arcandor announced it would be keeping its 52 per cent stake and would instead raise capital by selling shares to a German private bank.

Separately, Online Travel Group, a privately owned company that operated websites providing travel insurance and bookings for ferry crossings, airport parking, hotels and holidays, became the latest casualty. It has been placed in the hands of administrators at Leonard Curtis with the loss of 16 call centre jobs in Leeds.

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