There may be clouds over TUI but it still outshines Thomas Cook

On the face of it the answer is clear. One is a forward-thinking, well-run business with an excellent chief executive who is always slightly ahead of the curve. And the other is Thomas Cook.

But there is a feeling in the City - it's a minority view, otherwise the shares would have crashed - that TUI is not as different to its arch-rival as it likes to pretend.

That it is only a matter of time before the crisis at Cook arrives at TUI, the home of the Thomson holiday brand presently being promoted hard with touchy-feely John Lewis-style TV ads (Time for a holiday? God, yes.)

The case against TUI goes like this: it hasn't cut capacity quickly enough and will be left with unsold holidays. It has over-committed itself on accommodation and flights. It hasn't shifted enough of the risk on to hotel owners and airline operators. It hasn't moved to downsize its high street presence quickly enough. And it has lengthy leases on too many of its retail units.

Thomas Cook has been found wanting because it was indebted (to the tune of about £1 billion), offered old-fashioned holiday packages, had too many high street stores, too little internet presence and also had deals with airline operators and hotel owners that left it exposed to risks it should have offset.

All of which led to three profit warnings last year (if there is another one with first-quarter results tomorrow, no one will be hugely surprised).

TUI made a decent case for being a different kettle of fish today with its results for the past three months. It made a loss of £109 million, 27% worse than a year ago, but travel companies are usually in the red in the winter. More encouragingly, sales were up 5% to £2.85 billion and it is doing well, relatively speaking, in the UK. The total UK market is down 14%, says TUI, while its sales here are flat.

Peter Long, the TUI man with the plan, is forthright about the difference between his company and Thomas Cook.

"The answer for us is very clear. We have and have had a very different strategy. We are building a unique portfolio of holiday experiences and we are embracing the online world. We are not threatened by it. We are a different business to them."

Long's case, simply put, is that TUI's holidays are better than its rivals'. That, as customer expectations have risen (folk now expect more than just a week on the booze, somewhere hot), so have its own standards. He also insists that a family holiday is now so ingrained in people's lives that they will endure many other sacrifices before they give it up.

"There's no question that many of our customers are under huge financial pressure," he said today.

They are still determined to get away, but are increasingly going for all-inclusive deals. Around 55% of bookings this year are for holidays where food, drink and accommodation are part of the deal.

"It gives our customers value and certainty," about the amount they will spend on their vacations, says Long.

So TUI is clearly winning the fight with its most direct competition; perhaps it was never a fair battle in the first place.

And for now, most of the City believes in Long; analysts think he plays a good game as well as talks one.

Cook shares are 13p. Investors are likely to remain on vacation.