Airtours heads off for pounds 250m spree

Airtours is planning a spending spree costing up to pounds 250m to expand its overseas operations to a targeted 50 per cent of profits. Sources close to the holiday company believe an early deal will be the acquisition of Signature, a Canadian tour operator currently owned by UK rival First Choice.

Airtours, which has bought two tour companies in Canada since 1994, has said it believes the Canadian market is too small to sustain three major tour operators and David Crossland, chief executive, is understood to have spoken to new First Choice head Peter Long about buying Signature, which might be worth up to pounds 50m.

Boosted by buoyant profit figures, announced yesterday for the year to September, Airtours has a strong balance sheet and is also planning a rapid roll-out of its successful fly-cruise operation in which it currently runs three liners in the Mediterranean and Caribbean. Airtours' largest shareholder, Carnival Corporation of the US, is credited with creating the fly-cruise market in America.

In the 12 months to September, profits rose 46 per cent to pounds 86.8m as sales increased by 30 per cent to pounds 1.72bn. Earnings per share of 45.6p (32.8p) allowed a 14 per cent increase in full-year dividend to 16p (14p).

Mr Crossland said: "In a short period of time, Airtours has transformed itself from a purely UK-based company into an internationally diversified leisure group. These results show the group is in excellent condition."

Profits from overseas operations, which as well as Canada include a Scandinavian business, represented 42 per cent of the total in the latest trading year compared with 18 per cent in 1994. In 1993 all the profits came from UK holidaymakers.

The growth of the overseas operations helped cushion Airtours from the disastrous summer of 1995 when overcapacity caused a collapse in prices for late-booked holidays and a sharp fall in profits across the industry.

That experience led Airtours to cut capacity for this summer's holidays by 12 per cent, which was the main reason behind higher profits. Mr Crossland said the industry proved to itself that it could make more money by selling fewer holidays and he believes there has been a sea change in the hitherto highly cyclical and volatile business.

Capacity for summer 1997 holidays is forecast to remain at this year's lower levels and with bookings back to the levels achieved by this point in 1994, Mr Crossland said another good year was in prospect.

Airtours' good figures came only weeks after the Department of Trade and Industry said it was launching a Monopolies and Mergers Commission investigation into the UK holiday industry where the close ties between tour operators and the travel agents that sell their holidays have been seen as being anti-competitive. Airtours owns Going Places, both number two in their respective fields.

Suggested Topics
Arts and Entertainment
Game Of Thrones
Uh-oh, winter is coming. Ouch, my eyes! Ygritte’s a goner. Lysa’s a goner. Tywin’s a goner. Look, a dragon
tvSpoiler warning: The British actor says viewers have 'not seen the last' of his character
Arts and Entertainment
'New Tricks' star Dennis Waterman is departing from the show after he completes filming on two more episodes
tvOnly remaining original cast-member to leave long-running series
Esteban Cambiasso makes it 3-3
premier league
The Etihad Stadium, home of Manchester City
premier leaguePlus updates from Everton vs Palace
people'I hated him during those times'
Britain's shadow chancellor Ed Balls (L) challenges reporter Rob Merrick for the ball during the Labour Party versus the media soccer match,
peopleReporter left bleeding after tackle from shadow Chancellor in annual political football match
Dame Vivienne Westwood has been raging pretty much all of her life
peopleFirst memoir extracts show she 'felt pressured' into going out with the Sex Pistols manager
Arts and Entertainment
Lauryn Hill performing at the O2 Brixton Academy last night
musicSinger was more than 90 minutes late
ebooksAn unforgettable anthology of contemporary reportage
Lewis Hamilton in action during the Singapore Grand Prix
Formula OneNico Rosberg retires after 14 laps
Rumer was diagnosed with bipolarity, attention deficit hyperactivity disorder and post-traumatic stress disorder: 'I was convinced it was a misdiagnosis'
peopleHer debut album caused her post-traumatic stress - how will she cope as she releases her third record?
Arts and Entertainment
tvReview: 'Time Heist' sees a darker side to Peter Capaldi's Doctor
peopleActress tells men: 'It's your issue too'
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Senior BA - Motor and Home Insurance

£400 - £450 Per Day: Clearwater People Solutions Ltd: **URGENT CONTRACT ROLE**...

Market Risk & Control Manager

Up to £100k or £450p/d: Saxton Leigh: My client is a leading commodities tradi...

SQL Developer - Watford/NW London - £320 - £330 p/d - 6 months

£320 - £330 per day: Ashdown Group: The Ashdown Group have been engaged by a l...

Head of Audit

To £75,000 + Pension + Benefits + Bonus: Saxton Leigh: My client is looking f...

Day In a Page

Scottish referendum: The Yes vote was the love that dared speak its name, but it was not to be

Despite the result, this is the end of the status quo

Boyd Tonkin on the fall-out from the Scottish referendum
Manolo Blahnik: The high priest of heels talks flats, Englishness, and why he loves Mary Beard

Manolo Blahnik: Flats, Englishness, and Mary Beard

The shoe designer who has been dubbed 'the patron saint of the stiletto'
The Beatles biographer reveals exclusive original manuscripts of some of the best pop songs ever written

Scrambled eggs and LSD

Behind The Beatles' lyrics - thanks to Hunter Davis's original manuscript copies
'Normcore' fashion: Blending in is the new standing out in latest catwalk non-trend

'Normcore': Blending in is the new standing out

Just when fashion was in grave danger of running out of trends, it only went and invented the non-trend. Rebecca Gonsalves investigates
Dance’s new leading ladies fight back: How female vocalists are now writing their own hits

New leading ladies of dance fight back

How female vocalists are now writing their own hits
Mystery of the Ground Zero wedding photo

A shot in the dark

Mystery of the wedding photo from Ground Zero
His life, the universe and everything

His life, the universe and everything

New biography sheds light on comic genius of Douglas Adams
Save us from small screen superheroes

Save us from small screen superheroes

Shows like Agents of S.H.I.E.L.D are little more than marketing tools
Reach for the skies

Reach for the skies

From pools to football pitches, rooftop living is looking up
These are the 12 best hotel spas in the UK

12 best hotel spas in the UK

Some hotels go all out on facilities; others stand out for the sheer quality of treatments
These Iranian-controlled Shia militias used to specialise in killing American soldiers. Now they are fighting Isis, backed up by US airstrikes

Widespread fear of Isis is producing strange bedfellows

Iranian-controlled Shia militias that used to kill American soldiers are now fighting Isis, helped by US airstrikes
Topshop goes part Athena poster, part last spring Prada

Topshop goes part Athena poster, part last spring Prada

Shoppers don't come to Topshop for the unique
How to make a Lego masterpiece

How to make a Lego masterpiece

Toy breaks out of the nursery and heads for the gallery
Meet the ‘Endies’ – city dwellers who are too poor to have fun

Meet the ‘Endies’ – city dwellers who are too poor to have fun

Urbanites are cursed with an acronym pointing to Employed but No Disposable Income or Savings
Paisley’s decision to make peace with IRA enemies might remind the Arabs of Sadat

Ian Paisley’s decision to make peace with his IRA enemies

His Save Ulster from Sodomy campaign would surely have been supported by many a Sunni imam