Airtours struggles

Britain's second largest holiday company Airtours saw its profits slump in the last three months with losses in Europe and North America dragging the whole firm down.

Britain's second largest holiday company Airtours saw its profits slump in the last three months with losses in Europe and North America dragging the whole firm down.

In the quarter year to June 30, Airtours' profits were just £700,000 before tax. This compared to a £20.5m figure for the same time in 1999.

The shortfall came despite a 16% surge in UK holiday bookings.

Last month the group warned profits this year would be hit by the under performance of its German operation Frosch Touristik and continuing poor trading at its North American operation.

The group said its recent US acquisition Travel Services International continued to perform ahead of expectations.

In addition Airtours is in discussions with the owners of Hoteur, a leading Spanish hotel group, to form a joint venture involving their 18 hotels.

Airtours is also in discussions to convert part of its freehold property portfolio to long term leaseholds which should generate a "significant one-off profit", said the group.

Turnover in the three months to June 30 was £1.16 billion against £970 million at the same stage last year.