The Financial Week Ahead – Airtours stakes out Europe.

Poolside loungers are not the only holiday battlefield this summer for the Brits and Germans. The big tour operators are squaring up with their towels in a fight for European domination. Airtours today releases interim results amid a frenzied early season rush by fellow UK and German big players to jostle for a prime spot in the tour market. German engineers-turned-tour operators, Preussag, last week stole a march on rivals with its #1.8bn takeover of UK market leader Thomson Travel, to create the world’s largest package holiday operator with #7.2bn annual sales and 17 million plus passengers. But Airtours has not sat idly by. Former finance director Tim Byrne’s shift in February to managing director left a space for former Arthur Andersen partner David Jardine to takeover as the new group finance director. Jardine has done work for Airtours since 1993, and will have to put his extensive knowledge of the leisure travel industry to the test in the coming months. Last week the board’s decision to shed a three per cent stake in First Choice, the UK’s fourth largest tour operator, was seen as preparation for advances on Germany’s C&N Touristic. Leisure sector watchers believe Airtours is eyeing up the partnership to compete on the same scale with Preussag, who beat C&N to bed with Thomson Travel and the UK market, although the tie-up could raise problems for C&N ceding management control to the UK. It’s all a long way from the big non from Brussels competition commissioners to last year’s attempt by Airtours to buy First Choice for #850m which would have meant just three companies dominating the UK market. And a seven per cent plus rise in summer bookings should reverse the half-year losses of #45.3m, announced in February. The group, based in Manchester, has boosted its internet and US market capability with the #240m acquisition of Travel Services International. Airtours has pumped #40m so far into e-commerce with a further #100m over the next three years, and this month an internet travel service accessible via interactive TV, mobile telephones and personal computers was announced.

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