It is thought the EC took note of how operators have cut capacity in the past and the general agreement two months ago to delay summer 2000 brochure launches.
First Choice has now recommended to shareholders that they support a merger with Kuoni, which stays on the table until July 1.
Airtours will await the outcome of the EC investigation, which could take until October, before deciding whether to submit another bid.
Airtours will not bid for Kuoni if it completes a deal with First Choice.
Kuoni said it was still fully behind a merger with First Choice, while Thomas Cook, which has a 10% stake in the Crawley operator, said it is “reviewing its options” after supporting the Airtours offer. Sources suggested Thomas Cook will not support the Kuoni offer for fear it would make First Choice a direct competitor in the European market.
Meanwhile, Airtours announced interim losses of £27.3m in the six months to March 31 compared with £23.2m in the same period last year. The increase was due to the group’s expansion and Byrne said it was pleased with current trading.
AIRTOURS has revealed that the European Commission blocked its proposed take-over of First Choice because it feared the major players could conspire to push up prices.
As Airtours allowed its bid to lapse, group finance director Tim Byrne dismissed the possibility of collusion and said it would effectively be breaking the law if it did that.
“We thought the major issues for the EC surrounded the access for independent operators to charter seats. That is not the case,” said Byrne.
“We went to see the EC with a plan but it became apparent the major reason for its decision was that we could be in a position to collude.
“It is an unfounded fear and it’s inconceivable we would do this. It is clear it will take more than a couple of weeks to resolve this which is why we lapsed the deal. The Monopolies and Mergers Commission has already said the industry is very competitive and the margins are too small to suggest otherwise.”
It is thought the EC took note of how operators have cut capacity in the past and the general agreement two months ago to delay summer 2000 brochure launches.
First Choice has now recommended to shareholders that they support a merger with Kuoni, which stays on the table until July 1.
Airtours will await the outcome of the EC investigation, which could take until October, before deciding whether to submit another bid.
Airtours will not bid for Kuoni if it completes a deal with First Choice.
Kuoni said it was still fully behind a merger with First Choice, while Thomas Cook, which has a 10% stake in the Crawley operator, said it is “reviewing its options” after supporting the Airtours offer. Sources suggested Thomas Cook will not support the Kuoni offer for fear it would make First Choice a direct competitor in the European market.
Meanwhile, Airtours announced interim losses of £27.3m in the six months to March 31 compared with £23.2m in the same period last year. The increase was due to the group’s expansion and Byrne said it was pleased with current trading.