Air Ticket Price

The Clamor For Lowered Air Ticket Pricing

The Fair Trade Commission has started probing into a step taken by Japanese sirlines and travel agencies to halt air ticket price competition on suspicion of violation of the Antl-Monopoly Act. Following below-cost air fares introduced for trans-Atlantic and trans-Pacific flights by British and American carriers, Japanese airlines and travel agencies have scrambled for a 50-60 per cent rate cut to lure clients for cheap air ticket price. The commission thus believes that such a move might run counter to the Anti-Monopoly Act.

This has opened the way for selling cheap tickets to non-group tour passengers, leaving the Japanese industry caught in stiff rivalry. To cope with the situation, the Japan National Compliance Action Committee has worked out measures calling for a penalty system designed to punish companies selling cheap tickets and for strengthening market supervision.

FTC's investigation will be mainly into the action committee and major airlines. If the check proves a violation, the FCT is expected to urge the companies concerned to take proper steps to ameliorate the situation.

After a day of bitterly divided debate and confused voting, the member airlines of the International Air Transport Association (Iata) decided at their annual meeting in Geneva yesterday on tougher action to try to combat discounting - the sale of air tickets at less than officially approved rates.

The final resolution requires the 120-member airlines of Iata to achieve "positive results" in the attack on discounting by March 1 next year. The results will then be reviewed by the association's executive committee and then by a special general meeting in July at which it will be decided whether tougher action should be taken.

The scourge of discounting, which costs the scheduled airlines worldwide up to $1.5bn a year in lost revenues, has proved to be the most contentious topic at this year's annual meeting. The meeting is normally regarded as a "rubber-stamping" for decisions taken earlier by the all-powerful executive committee, which comprises the presidents of about a dozen of the world's major airlines.

This year, not only did the association's secretariat fail to recognize the deep divisions in the industry on how to handle this contentious problem, but many airlines felt that the whole matter was clumsily handled.

It is also required to ensure that by March 1 a measure of understanding has been achieved between all the airlines in his local area on the undesirability of discounting and to come up with proposals for its reduction, if not its elimination.