The underlying frustration in the industry, and more widely across business, was evident two days later at the Guild of Travel Management Companies' (GTMC) conference in Dubai.

Peter Drummond of Horncastle Executive Travel, who chairs the GTMC air working party, summed up the feelings of many when he said: "The government does not have an aviation strategy. It's not even on the agenda. There is no long-term planning."

Drummond was not quite right in one respect. Aviation is on the government's agenda. But it certainly does not have a policy.

The reason is the current government tore up the policy it inherited - for expansion at Heathrow - and binned the previous government's Future of Air Transport White Paper which set out a long-term strategy.

Now it wants the industry's help in drafting a preliminary replacement paper (a 'framework' document) from a reduced number of options.

The 2003 White Paper made assumptions about future demand and growth that are genuinely open to question. But the lack of capacity at Heathrow is blindingly obvious daily.

The reasons the coalition junked the paper and previous policy were purely political.

The Conservatives embraced opposition to a third runway at Heathrow ahead of the last election to channel support among voters under the Heathrow flight path in constituencies like Putney (represented by Conservative MP Justine Greening).

The policy shift also signalled a Tory move to the centre ground, away from knee-jerk support for business and towards concern for the environment - an issue that might more naturally be seen as 'belonging' to the left.

The Liberal Democrats had long since been part of the anti-third runway camp. The coalition agreement between the parties enshrined a block on expansion in official policy, where it is to remain until the next election.

So the GTMC was mightily entertained by Qatar Airways chief executive Akbar al Baker exhorting the UK to "act like us" and just get on with building a new airport.

The realities on the ground in Qatar and the UK are very different, of course. Doha has plenty of empty space for the new Doha International Airport now under construction next to the old. Bucks, Berks and Kent do not.

The UK does not have Qatar and neighbour Abu Dhabi's "box of money" either, as al Baker acknowledged - quite the reverse.

The cost of a Thames estuary airport is put at £50 billion, yet would almost certainly cost more - such projects always do - and this is just the bill for the airport, not the motorway(s) and express rail links required to take 100 million passengers a year to and from it.

Against a background of steepening government austerity (the biggest cuts are to come), it's hard to see a significant proportion of such a bill being placed on the government's books. Yet without state guarantees, why would major investers step in?

The UK does not have Qatar's political system either. Whenever and wherever a new airport or runway is sited will attract opposition. There is no way around that.

So the industry must deal with political reality.

The mood in the sector does appear to be shifting, from Heathrow towards a new airport, perhaps as a result of Mayor Boris. However, there are at least four key problems with this.

One is the cost. Another is the likely level of opposition, not just around the site of the new airport and from those opposed to airport expansion in general, but from those around Heathrow whose jobs, livelihoods and businesses would disappear. Of course, there will be opposition to any proposal, but a new airport is likely to attract the most.

A third is the time a new airport will take to get into construction, a process which might be expected to reflect the degree of opposition.

Boris Johnson's aviation policy advisor, Counciller Daniel Moylan of Transport for London, rather dismissed this at the Travel Matters conference, arguing it was "a matter of leadership" and political will. That is right up to a point. However, the project's opponents might display equally strong will.

A combination of legal challenges, electoral challenges, demonstrations, occupations and God-knows what else could produce quite a battle.

A fourth problem is British Airways (no offence) and its understandable opposition to moving from Heathrow.

Willie Walsh has made clear he won't entertain the idea. Boris Island is a non-starter as far as he is concerned, and if the UK's hub carrier refuses to move to a new hub, how is it going to happen?

Indeed, short of Qatar or Abu Dhabi investors buying up a site, building the airport, compensating all and sundry and moving carriers in, it is difficult to see a new airport winning investment without BA involvement.

Moylan suggested "Willie won't be there for ever". But neither will Boris - although he may be prime minister at some point before we see the back of him and Willie won't be that.

Councillor Moylan's vision of Heathrow is as a "premium leisure" point-to-point airport for "the comfortably off". "Heathrow would not have to close," he believes, "it would be a different airport."

Moylan is an engaging speaker. But I was more drawn to the view of Tim Leunig, chief economist of liberal think tank CentreForum, who also appeared at Travel Matters.

He dismissed Moylan's argument as "rubbish". "Heathrow will survive because it is where people want to fly from," said Leunig. "Boris Island will struggle to get off the ground."

With politics, like all human actions, comes cock-ups and unintended consequences which complicate the picture.

Among the most interesting asides at the GTMC conference was one from Tim Montgomerie, founder and editor of the influential Conservative blog ConHome, a man with connections to the heart of the Tory party.

He suggested David Cameron had welcomed Treasury secretary Chloe Smith to her new post with the words: "It's good to have an economist at the Treasury." Smith, who took over responsibility for APD among much else, replied: "I'm not an economist."

Montgomerie added:  "I'm not sure Cameron was aware of Justine Greening's history of opposition to a third runway at Heathrow when he appointed her transport secretary."

So that is where we are.

It is important, in any case, that the Secretary of State for Transport could be prevailed upon to address a travel industry policy conference when so often it appears from government policy that ministers have listened very little to the sector's concerns.

If Greening stays for the morning she will hear a presentation of economic research commissioned by Abta which quantifies the outbound industry's contribution to UK GDP and employment.

Hopefully, tourism minister John Penrose, also due to speak at the conference, will take a copy of the report away with him to read in conjunction with the latest monthly travel and tourism release from the Office for National Statistics, also due out this morning.

This will give the latest figures for inbound and outbound travel and the estimated value of each. It will then subtract one from the other to produce a figure showing a deficit in the UK travel and tourism economy, given the estimated value of UK travellers' spending abroad is greater than that of inbound visitors to the UK.

The Abta research will suggest the ONS figures are incomplete.

It would be interesting to know what Greening thinks of another piece of research, into attitudes to Heathrow among UK consumers.

The survey, referred to in the linked story, was carried out for Travel Weekly by Explore Research at the weekend. It was a relatively small survey of 500 adults, but carried out among a representative sample of people on Explore's panelbase of 180,000 UK adults. So we can consider it a reasonable snapshot of opinion.

It found 46% of those surveyed would avoid Heathrow at the moment (and two-thirds avoid Heathrow during the Olympics). A similar proportion, 45%, would not book a flight or holiday from Heathrow at present, and one-third "dread" flying to or from Heathrow.

God knows what the result would have been among non-European Union passport holders.
Respondents blamed the government, border control staff and BAA for the delays, in that order.

Perhaps surprisingly, more thought BAA should pay for the staff and technology to put things right (43%) than said the government should (36%). Possibly, they realised 'the government' would mean taxpayers.

One in five (21%) thought the airlines should pay, which will please Willie Walsh no end.
However, they did not blame the airlines, which may not fit with the hopes of some in the Home Office.

Just 4% of Explore's sample fingered the carriers, when barely a week ago the FInancial Times quoted an unnamed government official suggesting: "People standing in the [passport] lines [at Heathrow] often think it's the airlines' fault, not the government's."

A fellow official said: "The real answer is to get the airlines to pay for more security - that is the long-term answer."

Of course, whoever pays the bill, the burden will ultimately fall on air passengers.

Border control is a black hole for the airlines. In a way, it is a metaphor for government policy on aviation at present. There is an awful weight of matter sucking up energy, but nothing we can see.

It would be astonishing if Greening gave much indication of the government's thinking on this today, or on much else as her department prepares a document on the future of aviation for release this summer.

When she spoke at a recent Parliamentary reception hosted by easyJet, the transport secretary was full of praise for the sector, saying "this industry is really playing its part in getting the economy back on its feet.

But she offered nothing concrete. "I know there has never been a more important time in aviation. We are determined to work across government to help make a success of your industry," was how Greening responded to a direct plea to consider a review of the costs and benefits (?) of APD.

No matter: this morning forms part of a dialogue with the government and the industry must hope it continues.

Most recent indications pointed to a revival in the world economy, bolstered by better-than expected US economic data and the aversion of a meltdown in the euro-zone. The result was that stock markets rose almost continuously from December until Easter.

Falls in the London Stock Exchange, on Wall Street and in Germany and France yesterday may not yet mark a shift. They appear to have been triggered by a first round election defeat for President Sarkozy of France and the failure to agree government austerity measures in the Netherlands, allied to the appearance of some weaker economic data.

Recession was confirmed in Spain and a closely-watched index of economic activity in Germany fell to a near three-year low.

In the US, the Federal Reserve was expected to announce this week that the recovery is strong enough to forego further quantitative easing - a message that was considered sufficient to send a shudder through the markets.

The Financial Times quoted one analyst suggesting: "Markets have become accustomed to persistent monetary easing. This could prove a more difficult investment backdrop."

However, evidence of underlying problems was never far away despite the apparent resolution of the euro crisis. At the end of March, the Financial Times reported: "European finance ministers have been warned the underlying causes of the European debt and banking crisis have yet to be resolved."

Confidential reports by EU officials described the European Central Bank's provision of more than euro1 trillion (£833 billion) in cheap loans to banks as merely "a reprieve". It warned: "Contagion may re-emerge at very short notice . . . The euro crisis is not over."

Just before Easter, European finance ministers agreed a 40% enlargement of a bail-out fund for troubled euro-zone states, taking it to euro700 billion (£583 billion).

That came on top of the euro1 trillion and in addition to a separate bail-out fund accumulated by the IMF (International Monetary Fund). The IMF fund swelled from $500 billion (£320 billion) to about $660 billion (£420 billion) last week through a series of additions, including a promised contribution of almost £10 billion from the UK.

Yet the FT pointed out the euro700 billion in the European fund "remains far less than the combined borrowing needs of Italy and Spain for the next two years".

FT columnist John Authers noted: "It is hard to see how Spain could be rescued with the funds the EU has available. That is why the IMF is drumming up more."

Meantime, the UK economy contracted by 0.3% in the last quarter of 2011. The Organisation for Economic Cooperation and Development (OECD) forecast it would contract again (by 0.4%) in the first quarter of this year, putting the UK technically back in recession.

Other forecasts contradict this. The consensus among economists is for shallow growth of perhaps 0.1% in the first quarter, meaning an annual UK growth rate of 0.3%. That is economic stagnation to you and me.

However, the Bank of England (BoE) monetary policy committee has warned it can "not rule out the publication of official data showing GDP falling for three successive quarters".

Indeed, the BoE has already forecast a contraction in the second quarter of 2012 due to the spate of bank holidays during the period (Easter, May Day, Whitsun and the Queen's Diamond Jubilee).

The same committee warned: "There is a risk inflation could fall less rapidly in the near term than the Committee had anticipated in February . . . The latest upward pressure on prices is liable to delay the point when real household income will begin to rise again.

"Further contractions in output in the first and second quarters might further damage household and business confidence, even if the underlying pace of economic expansion were stronger."

So barring an as-yet undetected acceleration in growth, the economy remains in a parlous state. In the words of one leading economist: "What was already the slowest recovery in modern times has got even slower."

UK GDP remained 4.1% below its pre-recession peak ahead of tomorrow's announcement.

The implications for outbound travel demand are fairly obvious. The market should by no means deteriorate, but demand is hardly likely to leap forward.

Perhaps only the southeast Asian tsunami of 2005 surpassed it in scale in modern times. Yet Tokyo appears unchanged, and was unfazed by small tremors through the past week.

The rail system and rest of the infrastructure of Japan has long been back to normal. To the north of Tokyo, the region of Tohoku which bore the brunt of the quake and tsunami on its Pacific coast appears surprisingly at ease.

The view from the 'bullet train' on the two-hour journey between Tokyo and Sendai, a city of one million at the heart of Tohoku, offers little or no sights of reconstruction let alone destruction - although this cannot be the case on the coast where the tsunami swept inland for eight kilometres, smashing and washing away homes, workplaces and up to 20,000 lives.

There is no sense of disaster, recent or impending, even at the station stop in Fukushima, despite the continuing battle to control the reactors at the damaged nuclear plant nearby.

Up to 300,000 were rendered homeless, 160,000 of them displaced from the evacuated zone - the "cautionary area" - around Fukuskima.

I am in Japan because the World Travel and Tourism Council chose Tokyo and Sendai for its annual summit this week to show solidarity with its Japanese hosts and to demonstrate the revival of the country and resilience of its people.

Local tourism authorities report inbound tourism has returned almost to the level of 2010 after falling 60% in the wake of the disaster last March.

Noriko Abe, who owned a hotel in the worst-hit region of Tohoku, told the summit: "People were left with only the clothes on their backs. Everybody took to washing clothes in the river. People lost family members, lost homes. They had to travel 50 minutes to buy food."

Her hotel took in refugees. Noriko said: "We realised people would leave the city unless we re-established businesses." So they re-established them.

Hiroaki Takahashi, chairman of the Tohoku Tourism Promotion Organisation, said: "The damage was immense. Recovery was not easy, but we expect to see a move to full recovery this year."

He insisted: "There is no problem with daily life [in Tohoku]. Tourist spots are operating normally. Food and water are safe."

Takahashi reported radiation levels in the region outside the cautionary zone the same as in the rest of Japan, but said people continue to avoid food and water from the region because of "unfounded rumours".

"There is still a tendency not to travel to the Tokohu region," he said. "Sensational images of tsunami damage gave the impression the entire region was damaged or contaminated. There is a fear the entire region is affected by high levels of radiation."

The Japan National Tourism Organisation (JNTO) must be the only tourist office in the world now publishing local radiation levels.

Norifumi Idee, Japan Tourism Agency commissioner, gave an assurance: "You are entirely safe from radiation and radioactivity. Levels of airborne radiation are well within safe limits."
He reported the government recently toughened restrictions on the amount of radioactive cesium allowed in foods, raising Japanese standards well above those in Europe and the US.

Unfortunately, the assurance on airborne radiation is not entirely convincing, given there has reportedly been no breach of the shell encasing the reactors at Fukushima, unlike at Chernobyl in the Ukraine in 1986 where a meltdown blew the roof off a reactor and spewed radioactive material across Europe.

However, the problems at Fukishima have been every bit as serious as Chernobyl, despite months of denials by operating company Tepco.

The release of radioactive material into ground and sea water, and repeated use of sea water to cool overheating reactors, must have caused contamination. The measurements that matter will be of radioactive material in ground water and in plants and creatures on the Pacific sea bed where such material will begin its entry to the food chain.

On the day we spent in Sendai, the Japan Times reported: "One of the two remaining thermometers at the bottom of the pressure vessel of reactor number 2 at the Fukushima power plant is broken . . . The finding follows the discovery of a broken thermometer in the same unit in February and means only 18 of its 36 temperature sensors are working, magnifying concerns about the utility's long-term ability to monitor the crippled facility."

So a single working thermometer remains at the bottom of a reactor which, as the Japan Times reported, must be kept below "the threshold of 100 degrees when water starts boiling and radioactive materials are released".

Perhaps somewhat perversely, Toshiba chairman Aksutoshi Nishida, who also heads the Japanese Travel and Tourism Association, suggested the earthquake and tsunami had at least one beneficial effect on tourism by changing the country's attitude towards the industry.

He said: "After World War Two, diligence was seen as a virtue, recreation was a vice. Tourism was pleasure seeking, its status low. That has changed. People no longer see holidays as a vice. Tourism is appreciated more highly in the post 3/11 [March 2011] world."

In a sushi restaurant in Tokyo's Ginza district I was assured the fish came exclusively from the Sea of Japan, the other side of the country from Fukushima. It was and is a fabulous restaurant and I had not asked. But the concern is tangible.

The switch of media focus may be a blessing while the International Monetary Fund taps up Europe's chancellors for contributions to a $1 trillion bail-out fund it believes will be needed imminently, Greece moves toward the next Eurozone flashpoint when its debts fall due in March and France grapples with a credit-rating downgrade.

Latest UK economic indicators appear contradictory. Unemployment rose to almost 2.7 million or 8.4% in the three months to November, fuelled by job losses in the public sector. However, Office for National Statistics (ONS) figures showed a 2.6% rise in the volume of retail sales year on year in December - despite a fall in spending on credit cards.

KPMG's head of retail told the Financial Times: "Retailers achieved these sales through heavy and prolonged discounting and this has seriously damaged the health of the sector." That would explain the profits warning at Tesco.

At least inflation appears to be coming down, though it remains at least double the rate of earnings growth.

In the medium term, the government now plans seven years of public spending cuts and tax rises. The Office for Budget Responsibility forecasts that by 2016-17 UK output will be 18% lower than if the growth rates of 1997-2007 had continued. Or to put it another way, it could be 2015-16 before a household at the midpoint of UK income distribution attains the living standards of 2002-03.

Bank of England research on the impact of government austerity on UK households found 48% worse off last year than in 2010, and 69% expect to be worse off this year than last.

So what about travel? An indication of the strength of the January market should be emerging following a sluggish first week of the year. Comparisons with January 2011 ought to be tempered by the fact that the start to last year was particularly strong, when subsequent months were not.

The most up-to-date ONS figures show outbound holiday departures down 1% year on year in the 11 months to November, but a 5% decline in the third quarter of 2011 - July to September. That is quite a fall in a peak summer market that was already well down on the heady days of 2007-08.

The big two have already acted as though this is a sign of what is to come. Thomas Cook has cut capacity for summer 2012 by 8% year on year and Tui Travel has taken out 9%. Both could restore capacity, of course, although Tui must be the more likely to.

The past fortnight has tossed several straws in the wind: Flybe issued a profit warning following a sharp decline in traffic in the run up to Christmas; the Guild of Travel Management Companies (GTMC) reported a quarterly decline in air bookings for the first time since 2009; and AirAsia X pulled out of Gatwick.

The Malaysian-based carrier blamed APD and emissions trading yet also pulled out of Paris (no APD) and India (no emissions trading), so we can take it the economy and the price of oil were the major factors on top of the inherent difficulties of operating low-cost long haul.

AirAsia X only moved to Gatwick in October and we may presume founder Tony Fernandes did not take over Queens Park Rangers last August with the intention of withdrawing from the UK. Clearly, the current state of the UK market does not accord with Fernandes' view last summer.

Those predicting an improvement towards the end of this year may be right, but I wouldn't bet on it. If this summer ends well on price, with capacity 8%-9% down on 2011 and without a major failure, it won't have been a bad year - in the sense that it could be so much worse.

An assertion by the head of the accident investigation that the Concordia captain carried out a "clumsy manoeuvre" appears the least of the charges to be answered. But we should wait before drawing conclusions.

The testimony of a former sailor among the passengers that crew members "were incompetent" appears damning, yet there have also been reports of heroism.

One of the last to be rescued was an officer who broke his leg while scouring the decks for passengers. A Peruvian crew member who died was said to have slipped overboard while helping passengers. A cook from the Dominican Republic reportedly made repeated trips in a life raft to ferry passengers to safety.

Amid conjecture that the captain steered the Concordia near to the island of Giglio to salute a colleague onshore, it is worth noting a separate report that "cruise ships are known to sail close to Giglio's small harbour to give passengers a better view". We should also reflect that the captain's action in manoeuvring the listing vessel into shallower water may have saved hundreds of lives.

Yet regardless of the furore there are sufficient questions about what happened to doubt the emergency was well handled.

The first thing to say is that such accidents are highly unusual. The industry carries more than 21 million passengers a year and Europe's share of the sector comprises about 40% of this. It is five years since a cruise ship sank in the Mediterranean, off the Greek island of Santorini after hitting a reef shown incorrectly on charts. Two died. There has not been an incident involving such serious loss of life for 20 years.

The second is the disaster could have been much worse if the stricken ship had gone down in deeper water away from the shore.

This leads to a third and more general point. The Concordia was the largest cruise ship in the world when launched in 2006. It has since been surpassed in size repeatedly, with the largest ships now carrying more than 7,000 passengers and crew. It appears it was the ship's huge size above the water that led it to tilt in just 26 feet of water.

Two concerns follow: that designs have not taken sufficient account of this rapid growth in size, and safety procedures have not kept pace with ships carrying twice as many passengers as a decade ago.

A maritime safety expert suggested the latest cruise ships have a greater tendency to list if in trouble, that they are difficult to steer and vulnerable to high winds (the Daily Mail). Other experts suggested they are difficult to evacuate (The Financial Times).

The maritime union Nautilus insists: "These ships are floating skyscrapers. Alarm bells have been ringing with us for over a decade." Nautilus also queries how the ships are operated, saying: "We believe basic safety principles are being compromised."

Ships officers have expressed concern about training not keeping pace with technology, and Nautilus says: "Core crew are trained to high levels, [but] the passenger staff receive . . . a fraction of the safety training given to airline cabin crew." These are serious charges.

The growing size of ships reflects remorseless economies of scale and the industry is not about to perform a u-turn. Yet the Concordia raises uncomfortable questions. The evacuation does appear to have been chaotic. The charges need addressing.

The business paper the Financial Times suggested: "The terrible loss of life and chaotic evacuation suggest these floating mega-resorts carry significant risks." If that view takes hold among investors it will also undoubtedly be absorbed by a proportion of consumers.

The conclusions of accident investigators will go a good way to shaping the long-term impact.

But the sector already faced its share of issues - the flood of new capacity, the state of the economy and consumer demand, a push for growth in Europe chaffing against the troubled eurozone, the high price of fuel and a squeeze on margins. To these must be added a possible short-term impact on bookings and longer-term challenge of reviewing safety: not least the lifeboats.

It is sobering to be reminded, amid all the talk of technology in travel, that the life-boat system aboard the most modern, giant cruise ships is essentially unchanged since the aftermath of the Titanic which sank 100 years ago this April.

There were two surprises. One was a £428 million write-down in balance-sheet assets. This accounted for most of the £398 million loss before tax. It represents a clearing of the corporate deck.

The largest chunk of the downgrade stemmed from a reassessment of the value of the UK business. The slump in that business was made clear by the fact the UK accounted for just 10% of group underlying operating profit in the year to September.

The second surprise suggested a major reason for that slump: mainstream sales provided three-quarters of Cook's UK revenue. It made nothing from them.

The independent UK businesses made money. The group reported a record year in Scandinavia and its best ever in Germany. Why was it so bad in UK mainstream?

The consumer media will repeat its mantras that the package holiday is in decline if not already dead, the high street has passed away and the internet the only future. Elements of the travel sector will repeat these assertions - which, of course, contain kernels of truth.

Yet Thomas Cook's online sales in the UK declined year on year as a proportion of the total, although the number of web bookings rose. Acting chief executive Sam Weihagen pointed out the rate of online growth was sharper two or three years ago.

Cook has clearly not got its act together online, but Tui Travel UK mainstream managing director Dave Burling made a similar point barely a fortnight ago. He told Travel Weekly: "There is a tendency to think online growth is faster than it is."

At the same time, Tui's results gave cause to believe that, in parts, the package holiday is in rude good health.

Weihagen suggested several reasons why the situation at Cook is different. One was the legacy of Airtours and its pile-high-sell-cheap tour operating. Asked what was wrong with Cook's hotel offering, Weihagen said: "When Thomas Cook merged with MyTravel, MyTravel came with a lot of two and three-star hotels with the Airtours brand. It kept and traded them." He subsequently added: "The UK business has to find product people accept."

Weihagen was similarly open about the way businesses had been bought and brought together: "There were a lot of acquisitions. Maybe the previous management did not give enough attention to the complexity."

Yet the core of the problem was an emphasis on volume and little control of price. Asked whether discounting in shops had been "out of control", Weihagen did not demur. He said: "Mainstream UK sales made no money. We had far too much discounting.

"Discounting was done in two places - in head office and in shops. We have not had reliable systems in place."

Indeed, Cook revealed shops had been heavily discounting peak summer packages months ahead of July and August even when the programme was three-quarters sold. In future, it will limit the discounts shops can offer.

This is not to blame the retail staff, 660 of whom have learned their shops will close. We must hope Cook can honour its promise to redeploy as many as possible.

However, the problem comes down to this: Thomas Cook UK has had a fire-sale culture. No wonder there has been a fire.

The Treasury has listened but turned a deaf ear. It needs the revenue. It believes the industry can absorb the tax (or it won't get the revenue). It considers corporate travel will carry on regardless and the majority of voters won't notice. It believes overseas visitors to the UK will not be deterred by APD more than by other factors (the state of economies, the exchange rate of sterling, the price of oil).

The cost to destinations - particularly the Caribbean - appears to have counted for little apart from sympathy, but remains important.

Four points seem worth considering if the sector is to do better in the next phase.

One, the industry shot itself in the foot by issuing counter claims and arguments. For example, Virgin Atlantic argued for increasing the tax on short-haul flights to reduce it on long haul; easyJet argued short-haul passengers were subsidising the APD of long-haul passengers. Regional carriers and airports argued for a 'levy' on southeast airports to allow for an APD reduction in the regions.

This is not likely to stop, but needs bringing under control. The Axe the Tax group of airlines (BA, Virgin, easyJet, Ryanair) will go some way to doing that (and the Treasury has put the 'short haul versus long haul' argument to bed by making clear it won't penalise short-haul passengers more heavily. After all, there are a lot of them.)

Two, most roads seem to lead to making the economic case against APD - demonstrating the tax is hitting traffic, hurting the economy and costing jobs. This appears common sense, but will be tricky to demonstrate compellingly. There are too many other factors contributing towards these effects.

Three, the industry has argued consistently it faces 'a double tax' from January with the cost of the European emissions trading scheme (ETS). The US Business Travel Coalition was the latest to trot out this line, arguing: "When the EU emissions trading system kicks in . . . the cumulative negative impact on the UK will be orders of magnitude more grim." Sorry, it won't.

It's reasonable to want the cost of ETS offset against APD, although the government neatly sidestepped this early on by declaring APD purely "revenue-raising". But the point here is that the industry overstates its case and thereby loses the impact.

Emissions trading is not a tax - it will raise a small amount for the Treasury, a fraction of the APD revenue. The costs will largely go on carbon credits (to other companies or 'market' traders). These can be expected to grow over time, but should not amount to much in the first years. According to easyJet, the impact "should be below euro2 (£1.72) each way on long-haul fares".

By harping on about ETS the industry risks putting itself on the wrong side of a divide that has polar bears and David Attenborough on the other side. It is not helpful.

Four, I suspect the Treasury has had enough of the APD-bashing press releases. The department certainly appears combative. I've had a couple of calls to dispute industry claims.
For example, Virgin Atlantic made the point - following announcement of the rises next April - that passengers who have already paid to fly after April 1 will have to pay more. Virgin called it "retrospective".

No, said the Treasury: "It's not retrospective, APD is payable at the time you take the flight."  What is more: "The rise was well trailed . . . the rises are smaller than the indicative rises given . . . APD didn't go up this year . . . the industry was told it would be a double inflation rise . . . a small proportion of people book so many months in advance . . . [and] it's up to airlines to price APD into fares."

A final thought: might it weaken the case against a £13 APD rate on short-haul flights that Ryanair now levies charges of up to £100 for checked baggage? I know no one needs to pay it, but some do or Ryanair wouldn't make the profits it does.

However, the bank deal does not signal the end of Thomas Cook's troubles.

First, there is the issue of consumer confidence. It is right to stress the strength of the Thomas Cook brand, but the media has done the company no favours.

The furore on Tuesday and Wednesday was played out at the front end of TV news broadcasts and newspapers - item three on the BBC news, rolling coverage on Sky News, page three of The Times, The Guardian and others.

By contrast, reports of the bank deal were buried in the business sections this morning. The story was relegated from page three of The Times on Wednesday ('Thomas Cook on the brink') to page 62 today ('Thomas Cook lives to fight on'). That is a problem.

We know UK bookings were down 30% this week. That is not a disaster by any means. The company would only be taking a few thousand bookings anyway and it insists the problem did not extend beyond the UK. But this cannot continue into January

Second, the company has to deal with the issues that brought it to this point, Acting chief executive Sam Weihagen has acknowledged "management issues" in the UK. Unfortunately, it is a hell of a time for a turnaround - given the state of the economy, government austerity and a depressed market.

Third, the group has to deal with its debt. April 2013 might sound like a good way off to settle accounts, but it is not.

The good thing is the added debt conditions have not come at as high a price as might be expected, despite press reports to the contrary.

A £10 million fee is surely par for the course. A 5% interest rate is well above base rate, but it was bound to be. Inflation is above 5%. The point will be to pay back the cash asap through disposals.

The 4.9% of shares the banks now have an option on (at the current share price) almost exactly equals the portion of shares sold by Lloyds bank following the Tuesday's announcement.

These are not onerous terms - so long as Thomas Cook now gets things right and provides no further shocks.

Sadly there will be losers. Job losses are inevitable - on the high street, at tour operators that changes hands, at Peterborough and at the airline. So this is no time for glee.

But much of the media published obituaries for Thomas Cook this week, and the company is far from dead.

It suffered a crisis viewed through peculiarly UK spectacles which, too often rose-tinted in travel, took on the hue of the undertaker. The reality lies between.

Some perspective is required. The group's troubles stem from difficulties in the real world that were not foreseen by anyone in a position of authority in the government, the Bank of England, the International Monetary Fund, the European Central Bank and so on, to say nothing of the business press that now pronounce on the group's future.

A journalist friend - working in a different business sector - was staggered when I explained Thomas Cook could announce an annual operating profit in the order of £300 million. He assumed the company must be losing money hand over fist to warrant such a trashing.

On the plus side, Thomas Cook has its brand name and history - which count for something but not enough to save a company or its reputation. There are shades of Woolworth's here - a household name that is part of the furniture, a common factor in millions of people's lives. But Thomas Cook is not Woolworth's and should not go the way of Woolworth's.

The company is not tied to the health of the UK market. It is number two in Germany and Scandinavia - the number one and number three outbound markets in Europe (the UK is number two). What is more, it is making money in these markets. More than two-thirds of its operating profits last year came from Europe other than the UK.

The group has been making a healthy underlying operating profit - it was on course to hit around £320 million before the latest implosion. So it should be able to handle an overdraft. Yet it is currently close to worthless on the only measure that matters - its share value.

I hope this goes up because the livelihoods of a lot of people are at stake. In reality the share price is likely to bob around where it is for a time as traders buy at a low price and sell at a somewhat higher one. There was excitement when the share price rose 28% at one point on Wednesday (meaning an increase of less than 3p) before subsiding back to a value under 11p. For the record, the shares closed last night at just above 16p (47% up!). But such movements are largely meaningless.

What matters now are the banks, in whose hands Thomas Cook's immediate future lies. This is a bit like being in intensive care with only patients from the recovery ward to look after you, but let's look on the bright side. It would not be in the banks' interests to bring down the group. They would be writing off money that they have every chance of getting back, when what is required is hardly the stuff of Italian government debt.

I suggest Thomas Cook will pull through. It will announce the facilities it requires within days (the sooner the better) and a plan to restructure. It will slim down its tour operations in the UK to match its slimmed down airline. It will sell off what it can. It will focus afresh on retailing.

Its shares may well be swooped up by an overseas company, consortium or investment group. Why wouldn't a private equity company or a Chinese or Indian investor be interested in an iconic name with a sound base in Europe's major markets? Cook would certainly benefit from being taken off the stock market, which has brought it to its knees.

However, I struggle to see how Thomas Cook can climb back to where it was as a plc. The serial profit warnings under former chief executive Manny Fontenla-Novoa were bad (though there were not three of them in a single calendar or financial year). But there was a slow path to recovery open to a new chief executive - until Tuesday's hammer blow. Now City trust in future announcements will be shattered.

Given what had gone before, the timing of the decision to postpone delivery of the annual results while seeking additional funding is hard to understand.

The explanation that a trading meeting on Monday presented a picture suddenly so dire as to convince of the necessity of doing this barely helps.

If it were true that a sudden 20% deterioration in trading in France and Russia had proved decisive it would suggest: 1) that France and Russia have come to contribute inordinately to Thomas Cook's annual figures or 2) Cook had grossly over-estimated the contribution of these markets or 3) The management team was not paying sufficient attention to the state of trading - surely the worst implication?

If we rule out these explanations, as surely we must, we are left to ponder other possibilities. One is that Thomas Cook continued to talk with its banks over recent weeks after announcing a £100 million extension of its facilities in October. (But then why leave it until two days before the results to announce a delay when the fall-out was predictable? Perhaps there was hope until the last minute that a deal could be sorted.)

I wish Thomas Cook every success. The people working for it deserve better than this. But the company has been badly wounded and faces time on the operating table. It has every chance of emerging in decent shape, though not with every faculty undiminished.

Cook fell back 6.75% and Tui Travel 4%, despite the latter reporting a decent late summer and year-end figures in line with expectations.

EasyJet was one of the few to buck the trend with a 9% rise in value after it forecast record profits and gave notice of a dividend pay-out. Other major carriers fared nowhere near so well. British Airways' parent IAG was down 5%, Air France-KLM plunged 8.6% in Paris, and Lufthansa was down 5.5% in Frankfurt.

The German DAX was down 5%, so no great surprise there. But Lufthansa has had a torrid week - down 18% on last Friday after it issued a profit warning on Tuesday.

Europe's biggest carrier is still set to make substantial profits this year, but the warning was unexpected. The German market had been booming - both business and leisure travel - and Lufthansa had planned to increase capacity accordingly. Not any more: a plan in March to raise capacity this year by 12% fell back in July to 6% and will now be cut again.

Lufthansa had previously forecast profits this year would exceed those of 2010 when it made euro876 million (£765 million). Analysts had expected closer to euro1 billion for 2011. But on Tuesday, the carrier announced: "The target of a further increase on the previous year's figure no longer appears achievable." Small wonder Lufthansa is examining its options for disposing of BMI, which lost £106 million in the first six months of this year.

This may prove tricky - although I'm not suggesting BMI is the reason for the profit warning. Despite claims to the contrary in the travel press, it is nigh-on impossible to see British Airways walking off with all BMI's slots at Heathrow - thereby bagging more than half the total at the airport. Indeed, the fact BA has just bought a handful of BMI slots suggests it recognises as much. (The argument that Lufthansa has a higher proportion of slots at Frankfurt is irrelevant. There are empty slots available at Frankfurt, Schiphol and Paris Charles de Gaulle if a carrier wants to apply for them. There are no slots at Heathrow unless another carrier opts to sell.)

But back to that Lufthansa profits warning. It came on the day BA announced "the opening of a new chapter" - in chief executive Keith Williams' words - and its biggest brand-advertising campaign in a decade. BA believes it has turned a corner - with its spanking new Heathrow terminal, its merger with Iberia, its transatlantic partnership with American Airlines and its painful dispute with cabin crew in the past.

In many ways, undoubtedly, BA has done so. Its plans for capacity growth this year were more modest than Lufthansa's, at 7%-8%, and could be revised down this winter. However, as Williams told the audience assembled for a preview of BA's classy new TV ad, launched on Wednesday: "The industry has been through difficult times, periods of severe disruption, record oil prices and the deepest recession since the 1930s, but BA has emerged from it."

Yet I fear he may have spoken too soon. Lufthansa's profit warning is a symptom of the new phase of the economic and financial crisis we have entered. Germany has since 2009 been pretty much the only economic-success story in Europe. The slowdown in Germany is a symptom of the wider global slowdown. The world's second-largest exporter of manufactured goods - and until last year the largest - Germany is a bellwether for the health of the world economy. So the country's declining health does not bode well.

It is not good news for the eurozone, which requires German largesse. It is not good news for exporters to the euro area - the UK's biggest export customer. It is not good news for UK banks, which stand to suffer collateral damage when Greece defaults on its debt. And it does not bode well for Europe's biggest travel market, which has been the reason Tui Travel and Thomas Cook have done rather better this year than they might otherwise.

All in all, this is one time when it would be better if the Germans won.

The figures for July, released at the end of last week, show something rather different. The ONS headlines were that the number of visits abroad by UK residents increased 3% in the three months to July compared with the previous three months. Spending abroad increased 5%.

These are estimated figures, seasonally-adjusted to eliminate the peaks and troughs of summer and winter that would otherwise distort them. They should thereby reveal an underlying trend.

A more like-for-like comparison comes from pitching the figures for the 12 months to July 2011 against those for the same period to July 2010. This shows a 2% rise in all outbound trips from the UK, but a 1% fall in leisure trips - holidays. That is not so good, because the 12 months to July 2010 was not good.

The year on year comparison with the month of July itself is more telling still, since July sees the start of the summer peak season. Both outbound trips as a whole and overseas holidays were down by 6%, though business travel remained 3% up year on year in the month.

A couple of mitigating factors are worth noting. July this year saw a later than normal start to the school holidays in England and Wales, which is likely to have pushed back the start of the summer peak. July 2010 appears to have seen a mini-surge in outbound leisure following the end of the World Cup before the schools broke up.

The comparison with two years previously therefore may be helpful. It shows a 4% drop in all overseas trips from the UK for July 2011 versus July 2009, and just a 3% fall in holidays. That is somewhat better, but not great - 2009 was a dog of a year for travel and the situation has not improved. In July 2009 we had just seen four consecutive quarters of economic decline (falling GDP), remember. Since then the travel market has shrunk further.

Go back in time to July 2008 and the comparison is more telling still. ONS figures show leisure trips from the UK this July down 17% on the same month three years ago. All trips to Europe were down 18%, to North America down 35%, and to the rest of the world down 7%. This is slightly better than the same comparison in June which showed a 20% shortfall in all overseas trips. But remember the decline in the economy, and in outbound travel, began from mid-2008.

As I noted a month ago, this is the size of the market that has disappeared.

The ONS figures on spending overseas do not improve the picture. They show a 6% decline in spending by UK residents travelling abroad between July 2010 and July 2011. That is in line with the fall in numbers - the figures are for all trips - but it does not allow for inflation.

This spending figure does not include the full cost of trips - the air fares or payments to UK holiday companies - and average inflation in Europe, for example, is below that in the UK. But it suggests people are broadly spending the same as a year ago. They will be getting less for their money and the industry will be taking less.

A rising tide raises all ships, so Thomas Cook benefited from last week's mini-recovery at least up to Thursday. An 8% fall in its share price on Friday still left the group almost 25% up on the week. But don't get carried away: the shares opened this morning at just under 44p a pop.

Thomas Cook remains absurdly undervalued, but its shares probably won't pick up until the group has a decent trading update and full-year results under its belt, along with a new chairman and new chief executive - i.e. by late November at the earliest.

What is going on in the markets? The correlation in movement of the biggest US stocks has, in recent days, been at its highest since the stock market crash of October 1987 - meaning share-buyers are spooked and stampeding first one way, then another. HSBC chief economist Stephen King has suggested this is because: "Investors are desperately trying to find pockets of safety in a world where the financial system appears to be crumbling." (Financial Times, September 9).

The rise in share prices at the end of last week was triggered by a surprise move by central banks to pump money into Europe's banking system on Thursday. My guess is this will prove short term. Those investors who poured in on Friday will cash in and bail out. The central bankers' action smacked of "desperation", according to one analyst. The last coordinated action of this kind came in September 2008 and we all know what happened then.

There is a good deal for central banks to be desperate about. Greece is close to a default on its debt that could trigger a fresh financial meltdown. Indeed, there is a view that the central banks' action last week was to prepare the way for this. The cash injection will be available early in October, timed - it is suggested - to bolster the banks in the aftermath of Athens' default sometime between now and then. Add in a stagnating US economy, slowing German economy and Japan in recession and the world is in a stew.

The current market volatility is captured in these few lines from the Financial Times of September 13 (last Tuesday), the first of those four days of rising share prices. I quote from the introductions to leading articles on three pages: "Investors are panic-stricken about the future of the euro." "Time is running out for Greece." "Stocks in Europe tumble to 27-month lows." Inside, a senior economic advisor to Swiss investment bank UBS, George Magnus, warned: "Our economic predicament is not a temporary or traditional condition. The economic model that drove the long boom from the 1980s to 2008 has broken down."

Two days later we learned of the arrest of a 'rogue trader' at UBS, who is accused of creating a $2 billion hole in the bank's finances. It is not only governments at risk of default. UBS has already technically failed once in this financial crisis and, like so many UK banks, been bailed out. (The austerity measures we must now endure to balance the government books are a major reason Thomas Cook and other travel companies are struggling to sell as many holidays as in the past to strapped UK consumers.)

A gathering of European finance ministers in Poland on Friday received "a scolding" by US Treasury secretary Tim Geithner, who urged them to 'stop bickering' and suggested: "Governments and central banks have to take out the catastrophic risk from markets."

This is pretty rich on two counts. First, the markets took the risks. Why should tax payers bail them out? Second, Geithner was one of the architects of the catastrophe. Geithner was an enthusiastic proponent of derivative trading at the US Treasury through the 1990s where, as an assistant secretary, he opposed attempts to regulate such trading.

His demand for Europe's leaders to show political decisiveness is irrelevant. The indecision is global and stems as much from differing interests as from disagreements about the way forward. China has little reason to agree with, or support, US or European policy needs. Within the EU, German interests are not necessarily those of France and certainly not those of the weaker EU states. The divisions became obvious a week ago with the abrupt resignation Germany's representative on the board of the European Central Bank. In the US, Democrats and Republicans - president and Congress - could barely agree a budget this August and will have to repeat the process next year.

At the same time, there is resistance to the austerity measures that are the universal prescription of governments. This is most evident in Greece and is the reason Athens struggles to impose the loan terms it has agreed with the European Central Bank and International Monetary Fund. Were the spirit of the 'Arab Spring' to enter Europe, it would most likely do so through Greece. In the meantime, at the end of November, something of the spirit of Greece will come to the UK in the form of a one day, public-sector general strike following the Chancellor's autumn budget statement.

The only thing that is certain is that the chorus of demands for quantitative easing (QE) will grow. Since in the UK this would be the second round of QE, it is already christened QE2. Even supporters of the idea point out the first £200-billion injection by the Bank of England (QE1) achieved little other than to fuel inflation. A study by investment bank Goldman Sachs suggested the main impact was to push fund managers into investing in "more risky assets". It had little effect on bank lending, which was supposed to be the point. That might lead you to conclude there is little value in a repeat, but it leads QE supporters to conclude it's worth another punt precisely because it failed first time.

Where does this leave the travel sector? The industry will have to deal with an open-ended period of financial instability and economic stagnation (or worse) involving government austerity, a household-spending squeeze, political uncertainty and social rest. I would say that means organic growth, expansion and IPOs are 'out' and cash control and caution - and the odd distressed acquisition or merger - are 'in'.

Most other targets are static. An assault on a hotel or public transport can cause mayhem and terror - witness the 7/7 attacks on the tube and a bus in London, or the Mumbai attacks of November 2008. But an aircraft in flight can be turned into a missile, threatening not only the passengers onboard. It is both a potent weapon and a symbol - a response, in the minds of some, to the cruise missiles and long-range bombers the US fires from afar at its enemies. It constitutes what, in intelligence circles, is termed 'blowback'.

We should acknowledge that there has been no successful attack on the US since 2001 and that no aircraft flying to or from the UK, continental Europe or the US has been brought down by a bomb or turned into a missile - and this is not for want of groups and individuals trying.

Breaching airport security has become iconic - a declaration that 'the war' is not over - and the authorities are in an arms race with those wishing to do so. Both sides operate in the knowledge that, as the Provisional IRA put it after a bomb attack on a Brighton hotel in 1984 that almost killed Margaret Thatcher: "Remember we only have to be lucky once. You will have to be lucky always."

The Twin Towers attack was carried out using razor blades and sticky tape, remember. The failed liquid bomb plot turned hair dye into bomb-making equipment. The shoe bomber planned to punch a hole in an aircraft with a pair of trainers.

IATA says aviation security has "come at a great price in passenger convenience and industry costs". In the words of IATA director general Tony Tyler: "We spend a huge amount on screening people who do not need it. . . We are putting customers through an immensely complicated and, most of the time, unnecessary hassle and airports are creaking at the seams."

So there is a move towards 'trusted traveller programmes' which use travel records and frequent flyer details to identify 'low-risk' passengers. This sounds sensible, but there are problems with it. One is the issue of profiling, which experience suggests too often degenerates into racial (i.e. racist) profiling. Another is that it can be flouted by groups deploying bombers or hijackers who show 'normal' travel patterns or have fake identities, who are unknown to the authorities or who otherwise defy the expectations of staff trained to spot them.

A leading industry figure told Travel Weekly this week: "It's time for some standardisation. Security measures are often inconsistent." It's a fair point. However, as BAA's Ian Hutcheson pointed out, in a piece in The Guardian (September 8): "It is clear the terrorist is not deterred from planning and carrying out these types of attack. This is partly due to the fact that some of the things we do are predictable."

A proportion of airport staff now undergo training in behavioural detection techniques designed to identify passengers who behave suspiciously. Yet consider, would someone engaged in a bomb plot be more or less likely to behave oddly, to display signs of stress, in the knowledge that they need to negotiate a range of detection points, scans and searches which they have no chance of avoiding? It is in this context that their behaviour might appear 'strange' or that a verbal exchange at check-in or elsewhere might throw up an anomaly. Remove the sources of stress and there may be less to be nervous about.

This goes some way to address the complaint about inconsistency. There are inconsistencies due to a failure to generalise, or even to agree on, procedures. There are inconsistencies due to slack practice. However some of the unpredictability, such as whether passengers are requested to remove shoes, is deliberate.

Ask a proportion of passengers to take off their shoes and everyone will think they may be asked to do the same. This avoids the greater hassle and delay of asking everyone to do it. The secure alternative would be to require precisely that. The inconsistency is for a reason.

Airport security is a pain. But as the head of the US Department of Homeland Security, Janet Napolitano, told a World Travel and Tourism Council summit earlier this year: "It only takes one plane to go down . . . The public will take fewer flights if they feel it is not safe."

The commemorations this weekend will rightly honour the dead. They will also be marked by calls for a revision of the aviation security measures that followed. This is understandable, but requires some scrutiny.

The first thing to recognise is that 9/11 did not lead directly to the current airport security regime. The latter was the product of a process in which other events played a part.

September 11 led to wholesale searches of passengers and hand baggage, slowing passage through airports - a significant inconvenience to frequent flyers, a hassle to those who fly occasionally, and a cause of stress to those performing the searches. It ramped up airport and airline costs, which one way or another have to be passed on to passengers.

But subsequent events had at least as much impact. The attacks led US president George Bush to declare a 'global war on terror', supported by Tony Blair. War in Afghanistan followed almost immediately, launched by the US and UK on October 7 2001.

This not only continues to this day, but does so at an intensified level. By this August there had been 2,613 deaths among coalition forces in Afghanistan - and August saw the highest monthly US death toll since the war began - and an untold number of Afghan deaths. Afghan casualties are untold because no one bothers to count them.

The invasion of Iraq followed in 2003 and this, with Afghanistan, led to an increased terror threat - a fact repeatedly denied by the UK government but subsequently acknowledged by no less than Baroness Eliza Manningham-Buller, head of UK intelligence agency MI5 at the time. She told the House of Lords last year: "Our involvement in Iraq produced a fresh impetus to . . .  terrorism."

Fresh attempts to attack airlines and airports led to heightened security - in particular, after the foiled 'liquid bomb' plot at Heathrow in August 2006. BAA head of security Ian Hutcheson said this week: "It was the liquid bombs plot in 2006 that had a greater impact."

There is little evidence to suggest enhanced security has deterred people from flying. The number of global airline passengers in 2000 was 1.8 billion. This year there are forecast to be 2.8 billion, despite the consumer downturn here and in the US, economic hardship in much of Europe, the crisis of 2008, recession of 2009 and so on.

It is hard to deduce from this that security concerns have cost the industry growth in passengers, certainly compared to what further 9/11s might have caused. In the US, the difficulty many prospective visitors to the country experience in obtaining a visa may be having a rather more significant impact on visitor numbers. Certainly, this is the view of many in the US travel industry.

On the other hand, there is undoubted evidence that turning four aircraft into missiles with passengers aboard did deter large numbers from flying. The most stark numbers are these: there were 38,000 commercial flights in the US on September 10 2001 and 252 on September 12.

More generally, US passenger traffic fell 5.9% in 2001 - and the downturn was solely from September, which gives an idea of the sharpness of the decline - and it did not stabilise until 2003.

The impact on traffic elsewhere was minimal, however. Traffic in Germany, France and other European markets declined in 2001 but was already falling year on year prior to September due to recession. Traffic in the UK continued to grow, largely because the UK avoided recession.

Airline association Iata estimates carriers suffered a global revenue loss of 6% following September 11. To put that figure in perspective, they lost 14% between 2008 and 2009 as a consequence of the financial crisis and recession.

There have been beneficiaries of tightening security. One is UK-based Smiths Group, which makes airport security scanners and whose annual revenue has risen over the decade since 9/11 from £130 million to £574 million. Another beneficiary is the defence industry. US military spending has doubled since September 2001 and is now higher - in absolute terms - than at any time since World War Two.

A third beneficiary has been the surveillance and intelligence sector. The US government's National Security Agency and its multibillion-dollar facilities in Utah, in Texas and in Maryland will soon hold one septillion (that is, one million-billion-billion) pieces of information on individuals including travellers to the US. A fourth is the bureaucracy of security, such as the US Department of Homeland Security, which comprises what were formerly 22 separate agencies.

There appears little immediate prospect of scaling back this effort and expense. In the words of one US official, quoted in the Financial Times (September 8): "It is hard to redirect resources because it would entail substantive political risks." 

All security bodies appear to accept, in the words of a former US government official, that: "Sooner or later there will be another attack."