The German unit of Thomas Cook Group PLC, Thomas Cook AG, will increase prices for long-distance journeys by an average of 5% next summer, it said Monday.

A significant part of this increase is due to the air travel tax, as well as due to higher fuel costs and currency effects, Chief Executive Peter Fankhauser said.

Prices will however remain stable for short- and medium-distance routes, he said.

Fankhauser said the economic environment in Germany is positive and gives reason for optimism going forward into 2011.

With margins of more than 4%, the company's summer bookings for 2010 were above the previous year at the end of September.

"We want to grow profitably, but remain flexible to adjust capacity to demand," said Fankhauser, who is also a member of the executive board of parent Thomas Cook Group plc.

-By Kirsten Bienk, Dow Jones Newswires; +49 69 29725 500; djnews.frankfurt@dowjones.com