TORONTO--The North American subsidiary of U.K.-based Airtours bought Vacation Express of Atlanta--one of the largest tour operators in the Southeast--for $24 million.

The subsidiary, North American Leisure Group (NALG) based here, said Vacation Express will carry 100,000 passengers this year. Kevin Hernandez, the former co-owner and managing director of Vacation Express, will become its president.

He said Vacation Express will "conservatively" expand its U.S. gateways and its destination products. "The most logical [destination] expansion would be to the Caribbean," Hernandez told Travel Weekly.

Vacation Express became NALG's third large U.S. subsidiary, joining Sunquest Holidays and Suntrips, both based in California. The parent company, Airtours, is a Manchester, England-based public company that carries 8.7 million passengers each year. It owns and operates tour firms, travel agencies, hotels, cruise ships and an aircraft fleet. Carnival Corp. owns 29.6% of Airtours.

Hernandez called Vacation Express a good match for NALG because the tour firms have similar air-inclusive charter products, strategies and brand-name strength.

Vacation Express, founded in 1989, sells packages from nine gateways in Georgia, North Carolina, Washington, Tennessee, Ohio, Kentucky and Florida. Its primary destinations are Cancun, Cozumel, Aruba and Costa Rica. The firm's other two former co-owners, Meg Deeb and Grant Cookson, will have management roles still to be determined.

"Our strategy has been to leave brand names operating as is in their respective markets," said an NALG spokeswoman. "The big advantage is the increase in buying power and bringing those efficiencies to the value of the product."

In a statement, Leo Desrochers, NALG president and chief executive officer, said the acquisition of Vacation Express "will position us for growth in the Southeast, a large leisure market where we see considerable potential."

Vacation Express uses three charter companies: Falcon Airlines of Miami, United Parcel Service of Louisville, Ky., and Allegro Airlines of Cancun, Mexico. NALG entered the U.S. in late 1996 by founding Sunquest Holidays in Simi Valley, Calif., and, in spring 1997, acquiring Suntrips of San Jose, Calif. The two operate charters to Hawaii and Mexico from gateways in California and Colorado, with Allegro Airlines one of the main carriers. NALG also includes three Canadian tour operators, Alba Tours, Sunquest West and Sunquest Vacations, with the Caribbean and Mexico a focus.

With the sale, Vacation Express will gain the advantage of economies of scale of the larger company in negotiations with charter airline companies, an important factor as fewer aircraft are available for charter, Hernandez said.

He said that he and his partners decided to sell because they faced a "huge investment" decision in technology if they remained independent.

NALG also recently hired Gavin Scott, formerly chief executive officer of Toronto-based Sunflight Holidays, for the new position of vice president of corporate development. Scott will work with the North American tour operations on identifying integration potential.

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