Outlook: Airtours

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FOR THE second time in six years David Crossland, chairman of Airtours, find himself standing forlornly on the tarmac, bucket and spade in hand, as the First Choice jet glides agonisingly down the runway without him. Back in 1993 it was Thomas Cook which ruined his holiday plans when it took a 10 per cent blocking stake in what was then Owners' Abroad, foiling Mr Crossland's bid. This time it is those pesky regulators in Brussels smothering the deal with their beach towels and complaining darly about oligopolies. Is he doomed never to win the prize?

It certainly looks that way. The decision by Airtours to lapse its bid was hardly unexpected. The company was always going to find it tough to persuade the European Commission to short circuit its four-month investigation within days of it being announced.

But the move now leaves First Choice shareholders with a conundrum. Do they hang on in the hope that Airtours wins regulatory clearance and then re-tables its superior bid? Or do they choose the certainty offered by First Choice's merger with Kuoni even if the terms are clearly inferior.

The First Choice share price tells some of the story. Yesterday's fall to 181p leaves it standing well below the 188p see-through value of the Kuoni merger, indicating the City does not see a higher bid coming. Hanging on for Airtours would be a gamble even if it starts whispering sweet nothings about improved terms should it return.

Of course, the EU's insistence that there is a regulatory case to answer begs the question again as to just what the Department of Trade and Industry was doing in blithely declining to take the bid back under its own jurisdiction. This industry is vertically integrated like few others and there is clearly an issue to answer on whether consumers are being offered the best choice and price possible.

But this is by the by. First Choice shareholders now have three weeks to make up their minds. With the Kuoni deal already cleared by the competition authorities and backed by the board, the choice is between Kuoni's bird in the hand and Airtours' two in the bush. It is fair to say that the initial reaction from the City was that the plumage of the Kuoni fowl was at best uninspiring and at worst, downright manky. But a bird is a bird nevertheless and investors are likely to take it.

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