The formula will come into play once the excess income from property is more than 0.1 per cent of Railtrack’s fixed-track access charges in a particular year.. The 75:25 share of any additional proceeds would provide the most powerful incentive to develop its property assets and build a stronger business without compromising its duties to concentrate on and develop a better railway infrastructure.”Railtrack’s routine property sales have already been included in Mr Swift’s assessment of Railtrack’s access charges and therefore the announcement relates only to unexpected or particularly lucrative sales.Railtrack will be allowed to carry over any shortfall in previous years to offset against these windfalls. He appears to have bowed to Railtrack’s arguments that the company needs to be allowed to retain a substantial proportion of the net extra income in order to encourage further sales and property developments.He said: “Railtrack’s property is held for the benefit of its customers, passengers, other users of the network and shareholders. It has cut capacity for next summer by 14 per cent to 1.8 million.

Bookings to date, however, are very slow.The shares closed yesterday at 433p, up 33p on the day.Comment, page 19. CHRISTIAN WOLMAR

Transport Correspondent
Railtrack’s flotation received a boost yesterday when the rail regulator, John Swift QC, decided that the company could keep 75 per cent of any windfall profits from property development.The decision to allow the company to keep the lion’s share of a property portfolio that some analysts estimate could be worth pounds 2bn follows fierce lobbying by Bob Horton, Railtrack’s chairman.He argued that without a decent reward there would be no incentive for Railtrack to put effort into maximising the returns from its property, which includes a number of main stations.Sir George Young, the transport secretary, also backed the idea of putting what Railtrack’s advisers call a “property kicker” into the sale, so that the company can be marketed as a high-yielding utility with the added spice of potential property development profits.Mr Swift, who is responsible for setting Railtrack’s track access charges, issued a consultation paper suggesting a three-to-one split with the train operating companies for Railtrack’s extra income from property sales.Last year, Mr Swift intimated that Railtrack would be able to keep only a small amount of these windfall profits but he is anxious to ensure that Railtrack is attractive in the private sector. The company had been expected to lift profits from pounds 72m to pounds 85m.Airtours faces a critical three months in the post-Christmas booking period. Along with the other UK travel operators Airtours had a bleak year in 1995, a victim of the hot weather and a past policy of chasing market share by slashing prices.

Profits fell 22 per cent to pounds 59m after a profits warning in August, with profit per customer crashing from pounds 19.85 to just pounds 9.37. While useful to fund further acquisitions, Airtours does not need the money. The two are reported to be similar personalities who might be able to work together.City analysts said yesterday it was impossible to take a sensible view of the announcement until the details of the prospective deal were published. It has approximately pounds 80m of debt against a market capitalisation of pounds 450m.Yesterday’s announcement comes a month after Airtours reported its first profits decline in eight years. “The offer to existing shareholders could form a disguised rights issue,” one analyst said. David Crossland, Airtours’ chairman, accounts for nearly 27 per cent of the share capital, with the board in total speaking for 33 per cent.Michael Arison, the Carnival chairman, has 10 per cent of the cruise group. In 1994 it bought Sunquest Vacations in Canada, which rivals claim has been reasonably successful.But it is Airtours’ highly successful move into sea cruising – it owns two cruise ships working the Mediterranean – which is thought to have attracted Carnival’s interest.Any deal between the two companies will in reality be thrashed out between the respective chairmen who each hold large blocks of shares in their companies.

At yesterday’s price a 30 per cent stake would be worth approximately pounds 151m.Airtours’ directors were not available for comment yesterday. But Michael Arison, chairman of Carnival, said he did not expect the acquisition to dilute the group’s earnings per share. However, he could give no assurance that any agreement would be reached.Carnival, based in Miami, Florida, operates the Holland America line as well as Windstar Cruises and about 19 cruise ships that sail to Alaska, the Caribbean, the South Pacific and the Mediterranean. It has said several times that it wants to enter the European market but its last attempt failed when a partnership with Greece’s Empiotiki cruise lines was terminated last April.Airtours – which retails holidays through its 701 Going Places outlets as well as running its own charter airline – has been keen to expand outside the traditional European destinations.It offers tours to Sweden through its Scandinavian Leisure Group and is reported to be negotiating to buy the Danish operator Spies.

Airtours said the talks “might lead to Carnival taking a stake of less than 30 per cent in Airtours through a subscription for new shares and a partial offer to all shareholders”. Rickety stoves wedged between mattresses are a constant hazard.. SIMON PINCOMBE

Carnival Corporation, the world’s largest cruise ship operator, is in talks with Airtours over a co-operation deal that could lead to the US tour operator buying a near-30 per cent stake in the Manchester-based package tour and holiday company.
Airtours shares – already up 36 per cent on bid speculation over the past two months – jumped a further 33p to 433p yesterday, eventually forcing an announcement from the company. Four people are missing, while another five are in critical condition in hospital.