Bottom Line: Airtours takes a dive

AIRTOURS is ruffling a few feathers with its policy of going for growth through acquisitions. Confirmation yesterday that it was negotiating to buy SAS Leisure of Sweden for pounds 74m and a cruise ship for pounds 16m peeled 18p off the shares, for a two-day drop of 32p.

Analysts are concerned, and with good reason. The leisure sector is littered with disasters arising from headstrong acquisition policies.

There are two advantages in buying SAS. It will help to ease the strain of the incessant battle with Thomson for UK market share - SAS is also the market leader in what is the third-biggest European market for tour operations. Another benefit is the two-way holiday trade between the UK and Scandinavia.

That is fine, but investors might like to ask Airtours why it is not exploiting upmarket tour operations in the UK.

Kuoni, for example, earns 10 times more profit per passenger than Airtours' high volume, sell-it- cheap businesses.