Fears of a war in Iraq have prompted holidaymakers to put off booking trips forcing package operator First Choice to cut capacity.

Shares in the Crawley-based company fell more than five per cent in early trading yesterday after it revealed booking levels had slowed "significantly" in the past few weeks.

The company ann-ounced it was trimming back the number of holidays it offers in low season in order to protect profits.

The slowdown means the number of bookings taken in the UK for holidays this summer are already four per cent lower than last year.

In addition to fears over the international situation, the company said there was a trend among passengers to book holidays closer to departure.

But the company said despite the "challenging" start to the year, its overall performance since the beginning of November was still in line with its expectations.

Despite the slowing in bookings, the firm said margins were still ahead of last year.

Passenger numbers at the UK's major airports soared last month, it was announced yesterday.

Airport operator BAA's seven airports handled a 8.7 million passengers in February - a 6.3 per cent increase on February 2002.

The biggest rise was at Stansted airport in Essex where passenger numbers went up 24.2 per cent.

Numbers at Gatwick were up 5.9 per cent. Overall, domestic passenger numbers rose 12.7 per cent , while scheduled European traffic was up 8.6 per cent and European charter traffic increased 4.7 per cent .

North Atlantic traffic was up one per cent while other long-haul services were up 0.6 per cent . Only passenger numbers to and from the Irish Republic showed a fall - dipping one per cent.

Meanwhile, a new UK budget airline, called Now, has been launched and will start flying this summer.

Based at Luton airport in Bedfordshire, Now will fly to Manchester, Hamburg, Jersey, Rome, Lisbon, Ibiza and Tenerife.

Using two Boeing 737 300s, Now will add a third aircraft after three months, which will enable it to fly to two more destinations - Valencia and Dusseldorf.

The airline hopes to offer around 650,000 seats in its first year of operation and its inaugural flight will be to Rome.

Now said it will offer fixed fares according to destination and season so all travellers will pay the same amount for their seats on that flight.

All charges except for the £5 Government airport departure tax would be included in the price.

Wednesday March 12 2003