The reason Air 2000 cancelled the A330 was a business decision, they were not being "dumb." The following is as it was explained to me by an Air 2000 pilot;
When Air 2000 took over Leisure Internation their fleets seemed a pretty good match. Air 2000 having A320s, B757s plus B767s on order - Leisure had A320s, A321s, B767 and A330s on order. This would give a combined fleet very similar to Airtours and Monarch, but one of the first things Air 2000 did was launch a major fleet evaluation. The first thing they did was to pospone the order for 2 PW powered A330-200s and extend the leases of the 2 B767-300s they were due to replace, which really took people by surprise given how it's closest competitors Airtours and Monarch couldn't wait to get theirs. Why did this happen?
For a start they had the "wrong" engines, there would be nobody to support the PW engines in the UK. Everyone else (now BM) included in the UK has RR powered A330s
Air 2000 thought the A330 was too much of a step up in size, you'll always be able to fill it in a good year, but when there's a downturn it will hurt to fly something that big around half empty. Air 2000 thinks like that because it was one of the few UK charters that survived the reccession of the early 1990s, and they've always been very careful about big decisions. Also, it's difficult to fill an A330 out of any airport other than Manchester or Gatwick, the 767-300 fits both roles better seating only 312 people as opposed to around 360 - nobody makes money flying empty seats around the sky, Air 2000's average load factor is 92%!
In terms of passengers, they thought the 2-4-2 was better than the A330's 3-3-3, and in their Premium section 2-3-2 looked better than 2-4-2 on an A330 - more Business Class like. Galley space is poor on the A330 since charters only install the minimum forward and aft galleys, any more invloves taking seats out!!! The galley space is the same as on an A310, despite having an extra 150 passengers. The galleys on the 767 are bigger and make it easier for the crews, cabin crews hate the galleys on the A330.
One of the major ways holiday airlines in the UK make their Atlantic flights profitable is to carry cargo, and Air 2000 has gone one further and formed it's own cargo company, Viking Aviation. Cargo holds on their long-haul flights are usually packed full of cargo, generating a lot of money for them. It turns out that the A330 would carry less cargo than the 767 on long-haul flights. Although the A330 has a bigger hold, there are the bags of an extra 50 passengers to go in there and once all the baggage is loaded there are less container positions from freight. The problem is made worse by the downstairs toilets (as installed on Airtours' A330s), which take up a lot of room in the rear hold. Also, in cruise the A330 is more efficient with it's CoG towards the rear limit, and you can't get the weight back there because of the toilets!
On a typical Atlantic crossing, the 767 will burn 40-50 Tonnes of fuel, the A330-200 will use 5-10 Tonnes more fuel and carry an extra 50 passengers, but not a higher total traffic load due to carrying less cargo. So on paper although the A330 is more efficient, it burns more fuel for carrying the same traffic load, plus it's heavier, meaning higher ATC and landing charges.
Out of some runways according to a Monarch pilot, the A330 is payload restricted because of it's size, while the 767 isn't - allowing it to fly further. The A330-200 has the range, but at many holiday destinations there isn't enough runway to get it into the air!
So for an aircraft that claims to be so much more advanced than the 767 Air 2000 decided the benefits were not there to justify the huge expense of operating these aircraft.
I'll leave you with a quote about the A330 made by a pilot after the cancellation,
"I think this is a case where something looks great on paper (to the bean counters), but when you get down to the everyday, real world operations things ain't quite the same"
Time will tell whether they made the right decision. Air 2000 will probably operate the A330-200 in the future, but not for a few more years.