The next two weeks are going to prove crucial to the Balearic tourist industry and in particular the summer season. Leading United Kingdom and German tour operators have made it clear this week that, unless sales of summer package holidays to the Balearics start to show some signs of life before the end of January, flight capacity will be reduced. Last year flight capacity was cut by between 13 and 18 per cent, but this year, the cut backs could be even more drastic. Package holiday price wars are being fought on the high streets in Britain and Germany, but consumers are not responding to Balearic bargains. Leading tour operators are believed to be pushing Greece and Turkey in UK and Bulgaria in Germany, but despite Balearic holidays already at give away prices of £99 per person, Balearic holidays are not selling. In Germany package holiday sales to the region are currently 30 per cent down on January last year and tour operators do not know how longer they can wait for the market to kick in to life. At the end of the month, the industry is going to cut its losses with regards to the Balearics. In the UK, from December 27 to January 7, figures show that MyTravel (Airtours) was down 14%, Thomson down 32%, First Choiuce down 5% and Thomas Cook down 15% in general. In the case of MyTravel, one of the reasons it ended last year in financial trouble was that it was slow to react to the post-September 11 tourism downturn and reduce capacity, hence why it ended the summer with one million unsold holidays, an exanple none of the main operators will want to follow this year. Spain is however performing better than many destinations in the UK, but the Balearics is not selling and the Majorcan Hotel Federation is getting very worried. If it gets to this (further flight capacity reductions) summer 2003 will be worse than last year, a situation few businesses will be able to ride, Federation sources said yesterday. This week, the Balearic association of travel agents will meet to discuss the delicate situation but association president, Jaume Bauza, said yesterday people are already extremely worried because the outlook is very bad for the islands.