In early European trading on Thursday, the STOXX Europe 600 Travel and Leisure index was down 1.1 percent, underperforming a 0.8 percent fall on the broader, pan-European STOXX 600 index.

Traders said concern about an EgyptAir plane that went missing en route from Paris to Cairo weighed on the sector, and that disappointing results from Europe's second-largest tour operator, Thomas Cook, exacerbated the decline.

Thomas Cook reported a 5-percent drop in its summer bookings as higher demand for destinations in Spain and the United States were unable to offset sharply reduced bookings for Turkey, which was shunned by tourists amid a mounting threat of terrorist attacks. Shares in the company dropped 16.5 percent, their lowest level since March 2013.

Other stocks in the sector also fell, with Accor, TUI and InterContinental Hotels down 1.8 to 3.7 percent. Shares in aircraft manufacturer Airbus, as well as in airlines Air France KLM, Lufthansa and International Consolidated Airlines Group were all down 0.4 to 1.6 percent.

Egypt's prime minister Sherif Ismail said on Thursday that a search was underway to find the missing EgyptAir plane and it was too early to rule out any explanation for the incident, including terrorism.

"Search operations are ongoing at this time for the airplane in the area where it is believed to have lost contact," he told reporters at Cairo airport.

Asked by a journalist if he could rule out that terrorists were behind the incident, Ismail said: "We cannot exclude anything at this time or confirm anything. All the search operations must be concluded so we can know the cause."

uhe/jd (dpa, Reuters)