According to research undertaken for the Daily Telegraph, there will be 3.1 million fewer passenger seats available on flights to and from the UK in the final three months of this year.

The prediction comes from the Official Airline Guide (OAG), a body that monitors airlines around the world. Many of the world’s biggest airlines, including British Airways, have decided to ground flights to cut down on their spiralling fuel bills as they cope with "the worst trading environment the industry has ever faced," according to BA chief executive Willie Walsh..

Travel experts said that there was surprisingly buoyant demand from holidaymakers keen to guarantee their week in the sun during winter. However, because of the cuts in capacity– the number of flights and holidays on offer – some places are already booked out.

Northern Africa and the Caribbean have been particularly affected because these destinations were served by XL, the country’s third largest travel company that collapsed into administration last month.

Bob Atkinson at TravelSupermarket.com, the price comparison website, said: "We’ve seen quite a few XL passengers scramble to book Christmas holidays with other operators. And because capacity is being cut across the board that means availability could be scarce.

"Christmas is always a popular time, but if you haven’t booked by now you could be running out of time.

OAG estimates – using official industry flight schedules – that the there will be 22,500 fewer flights in and out of Britain in the final three months of the year. This equates to 245 fewer flights every day.

Frances Tuke, at the Association of British Travel Agents, said: "Some popular winter sun destinations – especially the Caribbean – are always booked up months in advance. What is interesting is that the credit crunch has led to no drop in demand."

The destinations that are seeing a real drop in demand are the short haul flights to Europe, as families decided to drop weekends away and half-term breaks. The big summer and winter holidays, however, are not being sacrificed.

Both Thomas Cook and Tui, the country’s two largest travel operators, have announced they are cutting their capacity by up to 8 per cent going into winter – a move that will further limit the number of bargains on offer this Christmas.

More than 25 airlines have ceased trading so far this year. These have included Zoom, Futura, Silverjet, Eos, Maxjet, Oasis Hong Kong and ATA. At least 23 tour operators have folded, and many more are expected to follow.

Such failures, while beneficial to the tour operators that survive, are likely to push the cost of package holidays even higher.

source: www.telegraph.co.uk