TRAVEL company Thomas Cook is to axe 1,500 jobs in the UK and is asking staff to take a pay cut of up to ten per cent in a bid to cut costs in the aftermath of the US terrorist attacks.

Half the job cuts will be compulsory as the German-owned group moves to make savings of £140m during the next year in the United Kingdom.

UK executives have agreed to cut their pay by 15 per cent and the company is asking staff who earn more than £10,000 to reduce their salaries by between three per cent and ten per cent.

Union officials said the job and pay cuts were a double blow for workers.

Thomas Cook, which announced last week that about 2,600 jobs would be lost across Europe, said that since the September 11 outrage, bookings for this winter and next summer's holidays had declined significantly across the industry.

Chief executive Alan Stewart, one of those whose pay will be cut by 15 per cent, said: "We are currently experiencing very tough market conditions. Whilst the measures we are taking are very unfortunate, they are also necessary at this time."

Thomas Cook, which employs 12,500 in the UK, said staff pay would be reviewed again in March and pledged that wage rates would be restored once the industry returned to normality.

The job cuts will be spread across Thomas Cook's network of 700 shops, tour operators JMC, Neilson, Style, Club 18-30, Sunworld Ireland and Skiers World and its JMC Airlines, the country's second largest charter airline