A Costly Compromise

After months of excited talk about sensational fare cuts on flights across the North Atlantic this summer, international airlines finally gave passengers the real news last week: starting April 15, rates will, in fact, go up. The 109 lines that are members of the International Air Transport Association, the industry's rate-fixing cartel, actually decided to continue fares at present levels through the rest of 1973--with certain adjustments to reflect recent rejiggering of currency-exchange ratios. For Americans paying for their tickets in devalued dollars, prices will thus rise an average 6%, boosting the round-trip cost of the cheapest scheduled New York-London flight this summer to $332, up $19 from last year.

The main reason for this disappointment was a dispute between the U.S. carriers (Pan Am and TWA) and British Airways over how much to charge for a new service that would have required passengers to book 90 days before takeoff for trips lasting 14 to 45 days. The British wanted to charge $240 in June and in August and $290 during the peak month of July, while the American lines adamantly held out for $299. Rather than risk a rate war when the current IATA agreement expires Saturday, British Airways and most other European lines, which also wanted low fares, agreed with the Americans on the present arrangement. The only holdout is Greece's Olympic Airways, but it is expected to yield. The "compromise" is likely to be costly to the scheduled airlines as well as to their customers. It seems sure to drive more passengers to the unscheduled airlines that run cut-rate charter flights for as little as $179 New York to London round trip.

This file is automatically generated by a robot program, so reader's discretion is required.