Holiday giants Thomas Cook and TUI Travel narrowed first-quarter losses after reporting increases in the average price of package holidays.

Britain's second-biggest travel company, Thomas Cook, held off from dis-counting as it reduced its supply, pushing average selling prices up 12% this winter and 3% for summer.

Bookings for summer were down 5% at the group, which has issued a string of profits warnings in recent years, but it narrowed its operating loss 24% to £70 million in the three months to December 31.

However, rival Thomson and First Choice holiday operator TUI Travel saw a surge in demand for its sum- mer holidays, despite also reporting higher prices.

The group said it had already sold more than one-third of its UK summer holidays, with bookings 9% ahead of last year as more customers opt for the certainty of all-inclusive deals rather than DIY trips.

The group said average selling prices for the summer were up by 4% on a year earlier, around half of which reflected cost inflation and the rest from selling more exclusive deals.