Pay Now, Go Later-and Cheaper

With the ink barely dry on the 1977 brochures, the outlook for spring/summer air travel is becoming clear. Flying is in for a big boost. One major reason: the new ticketing arrangement called Advance Booking Charters, which enables passengers to get low-cost round-trip air transportation with fewer restrictions than on any of the previous charter plans. Authorized by the Civil Aeronautics Board last October, ABCs are now being pushed aggressively by both scheduled and nonscheduled airlines, notably by Britain's ebullient charter operator Freddie Laker (see box).

A bonanza for budget-conscious vacationers, ABCs are the latest addition to the confusing alphabet soup of special fares with which the airlines have been wooing cost-conscious travelers (see chart). Ironically, ABCs came into being last fall because of politics as much as economics--specifically, Gerald Ford's election-year advocacy of reduced Government regulation. The CAB yielded to pleas by the charter airlines to allow all carriers to offer, through travel agents, a more flexible plan: seats booked 30 to 45 days in advance, but no prepaid hotel accommodations and minimal restrictions on length of stay.

Not all foreign governments have as yet agreed to accept ABC flights. Nonetheless, about 50% of all charter applications received by the CAB since October have been for ABC trips, competitively priced as much as 40% below regular economy rates on scheduled flights. (In 1975 U.S. charter or supplemental airlines held about 10% of the total passenger travel market between Europe and the U.S.) Hotelkeepers, who stand to lose since ABC passengers are not required to buy ground accommodations, remain unperturbed. Says Arnold Orenstein, general manager of the Puerto Rico Sheraton in San Juan: "The more people travel, the better it is for us."

The scheduled airlines, though, are not all pleased. Charter carriers, they point out, do not have to provide year-round service on less popular routes. The newcomers, in the words of a Trans World Airlines executive, "skim the cream--run into the market, grab what they can in peak season and get out and into another market." To compete with the charter outfits, the scheduled lines claim they may eventually be forced to curtail their regular services. Possible result: lowered earnings for the big carriers, who have already had plenty of profit problems in recent years.

ABCs may be a headache for the scheduled airlines, but they could prove a minor worry compared with another nightmare looming on the aviation horizon--Skytrain, Freddie Laker's proposed international air shuttle. Skytrain is aimed at a sector of the travel market that even the ABCs do not cater to: passengers who are both on a budget and unable to plan ahead for cheap charter fares. They include, in Laker's definition, the less than affluent citizen "who gets a call that Aunt Matilda is very sick and wants to visit her before she dies."

No Frills. Skytrain would offer scheduled, unreserved, one-class service. Tickets would be sold at the airport six hours ahead of flight time on a first come, first served basis (excess passengers presumably would be turned away). Meals would cost extra; there would be no cargo and no travel agents, thus saving Laker the cost of their commissions. Laker says he could fill 80% of his planes --compared with about 60% for the scheduled airlines--and thus could offer New York-London one-way fares as low as $135.

Both fans and opponents of the Skytrain concept agree that it could wreck the present standard-fare structure set by the scheduled international carriers. Says Bob Debienski, a New York City travel agent: "Skytrain would destroy them." If the shuttle concept spreads, all carriers might be forced to compete with similar cut-rate shuttles. The result could be too few passengers to go around and fares too low to permit anyone to stay in business.

Laker, whose charter operations this year will earn an estimated $15 million in the U.S. alone, says the number of Skytrain seats would be limited so that that does not happen. He is convinced that there is room for Skytrain in the transatlantic market, and he is not ready to give up his dream. "World air travel is not the prerogative of the few," he declares. "God gave us sunshine and the airplane. We are all entitled to enjoy them."

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