Airtours buys Sun World

Airtours, the UK's second-largest tour operator, yesterday signalled plans for the rapid expansion of its European travel business after announcing the pounds 70m acquisition of Sun World, Belgium's largest tour operator.

Airtours already has a large business in Scandinavia. The planned takeover of Sun World would give Airtours around one-quarter of the market in Belgium, as well as a toehold in France and Holland. Airtours is also eyeing up the German market.

Harry Coe, Airtours deputy chief executive, said yesterday that further European acquisitions were on the cards. Airtours is also keen to grow in North America. However it will have to compete for acquisition targets with arch-rival Thomson which recently announced intentions to expand across Europe. Thomson is also believed to be keen to capture a large share of the German market.

Airtours is embroiled in a 10-month inquiry by the Monopolies and Mergers Commission into the links between travel agents and tour operators. The MMC, which has been investigating alleged anti-competitive practices, is due to pass its report to the Secretary of State in November. However a final decision is not due until early next year.

MMC concerns have focused on vertical links in the industry between tour operators and travel agents and the practice of tying together holiday insurance and discounts. Airtours said yesterday the most likely remedies from the MMC were rebranding tour operator-owned travel agents and untying of insurance and discounts. Mr Coe tried to play down the effects of such a move, claiming it would not be a big deal. However analysts believe that Thomson and Airtours are likely to be worst hit by such measures.