The company that operates concessions at Grand Canyon National Park has reached a deal in principle to buy the historic Grand Canyon Railway, which was placed up for sale earlier this year.

Xanterra Parks & Resorts sent a letter of intent to buy the railroad on Thursday, said David Chambers, the railway’s president. A final deal is expected by late October and National Park Service approval by early 2007, Chambers said. Terms weren’t disclosed.

The railway runs 65 miles from Williams to the South Rim of the Grand Canyon. Nearly 225,000 passengers rode the rails in 2005, bringing in revenues of $38 million, Its owners, Max and Thelma Biegert of Paradise Valley, Ariz., put the operation up for sale in March and Xanterra was one of three companies considering a purchase.

"There’s a feeling that Xanterra will be in a position to grow the business in the direction that Max and Thelma want," Chambers said. He said another major selling point was Xanterra’s intention to keep the railway’s 480 staff .Mona Mesereau, a spokeswoman for Xanterra, said the Denver-based company would not comment on the interim deal.

Xanterra operates hotels, restaurants and stores at many of the nation’s most popular national parks, including Grand Canyon, Yosemite, Yellowstone, Mount Rushmore and the Everglades. It is the largest operator of concessions at national parks.

The purchase includes two steam locos and 29 passenger cars currently in service, plus six diesel locos and 14 passenger cars not currently used. The railway depot and restaurant in Williams, the adjoining Grand Canyon Railway Hotel, 162 acres paralleling the tracks in Williams and 160 acres near the park boundary are also included.

The railway was closed for nearly 20 years before the Biegerts reopened it in 1989. In the early 1900s, it was the main mode of transportation to the Grand Canyon.