Airtours-First Choice deal 'on cards'

THE go-ahead for a merger of travel giant Airtours and its rival First Choice will come within weeks, industry sources believe.

They expect that a 1999 decision by the European Commission to block Airtours' £950m hostile bid will be overturned by appeal judges.

That will clear the way for the merger early next year and the transformation of the UK package holiday business.

At an appeal hearing two weeks ago, independent judges challenged the EC's claim that reducing the number of major players in the market from four - Thomson, Airtours, First Choice and Thomas Cook - to three would lead to 'collective dominance'. Airtours chief executive Tim Byrne refused to say if he would re-open talks with First Choice.

But he confirmed: 'We would review the position. Life has moved on since 1999 and both companies look very different now. But nothing is insurmountable if both sides feel they can benefit from a deal.

'A lot rests on this decision and it could have a huge impact for travel companies. If, effectively, the court says the market can go from four major players to three, any of the big guys could get together.'