The travel firm said 12 repatriation flights, compensation payouts and customer welfare expenses had all contributed to the estimated cost after it cancelled outbound journeys and evacuated 8,000 holidaymakers during the crisis in Rhodes.

It said the Greek island accounted for around 5% of its summer schedule - but said 80% of its guests there had been "unaffected" by the fires.

The disclosure came in TUI's new quarterly statement - in which it reported underlying group earnings before interest and tax of €169m (£145m) in the three months to June.

The figure is up sharply on the €27m (£23m) loss it reported during the same period last year and its first third quarter profit since COVID hit in the spring of 2020.

The Germany-based package holiday group said average selling prices surged by more than a quarter compared with summer 2019, and were 7% higher than last year - but said this reflected customers' willingness to prioritise spending on holidays.

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TUI said the £21.5m estimated cost of the wildfires would be added to its full 2023 results - but said the outlook for the year overall was encouraging.

Chief executive Sebastian Ebel said: "Summer 2023 is going very well and demand for holidays remains high. The Mediterranean remains the most sought-after destination for summer holidays.

"The heatwave in northern Europe in June and the wildfires in southern Europe have only dampened temporarily the previously strong development - but overall it will be a very good travel summer and a good year for TUI in 2023."

Mr Ebel also said the climate in Greece was "not as it was described", despite the country battling 10 major wildfires in July, including blazes outside Athens and on Rhodes.

But he said the company would broaden its portfolio of destinations to mitigate against climate-related risks, amid expectations that regions with more moderate temperatures, such as the Nordic nations, could become more popular.