The online travel agency Ebookers has gone back on the acquisition trail, buying rival agency Travelbag for �55m.

Travelbag has annual sales of about �200m and operates under three brands - Travelbag, Bridge the World and Travelbag Adventures.

Ebookers said the two firms complemented each other, with the online agency strong on travel to the USA and Europe, while Travelbag mainly sells trips to Australia and New Zealand.

The two companies are set to combine their head and back offices, with many functions being transferred to Ebookers' operation in India.

Rapid growth

Ebookers sells package holidays, flights and car rentals over the internet in 11 European countries.

It has already bought a number of traditional travel agents and used its internet expertise to increase their sales.

Ebookers plans to repeat the same trick with Travelbag in its quest to reach annual sales of �1bn through a combination of takeovers and natural growth.

The Travelbag deal will give the Ebookers group sales of about �500m a year.

Ebookers said the increased size of the business would allow it to negotiate bigger discounts thanks to its increased buying power.

The two brands will retain separate sales and marketing teams, but many day-to-day functions such as accounts, ticketing and e-mail sales will be moved to Ebookers' facility in India.

Departure

Also on Tuesday, Ebookers said its managing director Dr Sanjiv Talwar was leaving the company.

It said Dr Talwar had decided "to take a break from his career for health reasons".

His responsibilities will be taken over initially by Ebookers' chief executive, Dinesh Dhamija, and the rest of the management team.