Tour operator Thomas Cook expects operating profits to rise in the coming year and has predicted that it has recession-proofed its business after cutting capacity and clamping down on costs.

The travel firm said that full year pre-tax profits climbed by 32 per cent to £309 million, in the year to September 30 as it benefitted from increased revenue and operating margins up 35 per cent.

Current trading is still in line with expectations, despite the challenging environment, the group said. "Recent research and the high load factors we are currently experiencing give us confidence that consumers remain intent on taking their holidays. We believe our strong financial position, together with the increased synergy savings and contingency measures we have put in place, will enable us to sustain a market-leading performance throughout a challenging 2009," the company said.

Thomas Cook follows rival TUI Travel in demonstrating resilience in the consumer downturn.

Europe’s second biggest travel firm was created last year from the tie-up of Germany's Thomas Cook and Britain’s MyTravel. The company has said that the integration of the two businesses has been "highly successful" and raised its synergy targets from £155 million to £215 million by 2010.

For summer 2009, the group has sold 24 per cent of capacity in the UK so far, broadly in line with last year’s level.

The group said it is confident of prospects for 2008/9 and is targeting an operating profit of £480 million for 2009/10.

Bookings for winter 08/09 or down 4 per cent in the UK and down 6 per cent in continental Europe. However, the company has made capacity cuts of 6 per cent in the UK and 6 per cent in continental Europe.

Summer 09 bookings are down 8 per cent year on year in the UK, but are in line with planned capacity which is down 11 per cent. Average selling prices for the summer are roubst, up 8 per cent.

The company said: "In additions to our own capacity management, we have seen capacity rationalisation throughout the industry which gives further confidence that we can trade successfully through the current conditions."

"Capacity reductions in the UK market, for example, amount to approximately 25 per cent over the last two years, through our actions and those of other market participants," Thomas Cook said.

Thomas Cook is to pay a final dividend of 6.5p per share, making a total payout for the year of 9.75p, up 95 per cent.

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