against cheaper air fares...

Australia ‘protects’ its public against cheaper air fares...

Cheap air fares across the Pacific from the North American west coast to New Zealand, via places like Fiji, American Samoa and Tahiti, are receiving close attention from airlines and governments. The stumbling block to cheaper fares is the Australian Government which, through Transport Minister Peter Nixon, gives lip service to the principle, but through the bureaucracy, says a cheaper fare is not in the public inist.

Apparently Australia does his to protect Qantas, the country’s international tirline. Not that Qantas needs protection; in fact to suggest protection is almost an insult o Qantas management.

Air New Zealand and Pan \merican World Airways, the nain competitors of Qantas m the Pacific route, have adused of cheaper fares across he Pacific. Some of these serdices will be via Pacific Is-

lands and of direct interest to places like Fiji, American Samoa, and Hawaii, and to a lesser extent to Tahiti. True there are a number of strings, such as pre-payment of fares, limitation of aircraft capacity to these fares to something like 15% , and having to travel vvhen the airline says so.

The incredible Australian reaction was to ban adver- Using, promoting or selling these fares in Australia, even though they represent a subs tantial saving to passengers on whom airlines depend for their bread and butter, From a practical point of view Australia could not stop such advertising in Australian newspapers. But as the Australian Government con trols the licences of television and radio stations it could “lean on” that media to stop cheap fare advertising. But what the Australian Depart ment of Transport did was in voke a section of the Air

Traffic Regulations to prevent any undercutting of an exist ing bilateral fare agreement between Australia and the United States. This prevents Air NZ from advertising the cheap fare if it is combined with the cross-Tasman fare.

The cheap fares Air NZ and PAA want to apply between NZ and North America are about $5BO return, compared with $951 as the cheapest return fare between Australia and North America. When the trans-Tasman fare of $202 and the NZ Government’s travel tax of 10% are added, the return fare from Australia via NZ comes to only $842, still $lO9 below Australia’s cheapest fare.

PAA would like the cheap fares to be established before Continental Airlines starts flying to the South Pacific.

Australia, fighting hard for Qantas, claims there will be an excess US over-capacity on

the route. It will point to the failure of American Airlines, which lost $32 million over three years on the South Pacific route. However, American could only fly from the eastern part of the US, whereas Continental will fly from California. American was unable to generate suffi cient traffic in a new market area.

Australia would probably be quite happy with the four Continental services a week, provided there was a cut-back in PAA services. But Presi dent Carter and his admin istration in their approach to civil aviation lean to an “open skies” policy, with more inter nal and international com petition. That could lead to cut-throat competition and a survival of the fittest, which might not be a bad thing in the long run if it led to cheaper fares and more efficient ser vices.

...And Pan-Am Puts Its Case

For A Budget Fares Plan

Since late in 19 77, Pan American World Airways has

>een progressively introduc-

ng a new type of fare a ►udget fare— on its scheduld routes around the world, /lore recently, it has been oncentrating on extending he fare to the South Pacific.

Air fare reductions averagng 50% are at present ennyed by travellers in the US, everal European countries, he UK, the Philippines, Hong

Singapore, Taiwan,

hailand, American Samoa, iji and New Zealand. A PAA udget fare is also being conidered by the governments of ndonesia and Japan.

However, the airline’s fareat proposal has been stalled i Canberra. Present indicaons are that it will be some me probably not before ie middle of the year etore Australians can enjoy ie same cheap air travel as ieir Pacific neighbours.

For example, the budget ire now enables New Zealan-

ders to fly to any one of the four US West Coast cities (Los Angeles, San Francisco, Portland and Seattle) and return for only $582. They pay 21 days in advance and have no minimum or maxi mum stay limitations while in the US.

However, the cheapest fare for Australians is $951 and they must pay 60 days in ad vance for a visit restricted to not less than 14 days and no more than 45 days.

Pan-Am sought to reduce this fare by almost $250.

The airline told Canberra it was prepared to fly Australians to the US and back for only $706, under the same conditions as those ap plying to the New Zealanders.

Canberra said no and rejected the budget fare proposal.

Pan-Am has since re submitted the fare to the government committee, ap pointed last year to review Australia’s international avia tion policies. One important

area of the committee’s in vestigation is low fares.

However, the committee was not scheduled to complete its investigations till March 31 and industry observers agree that no major decisions on in ternational aviation are likely to be made before the middle of the year.

Pan-Am tried again.

As an interim measure the airline proposed combining the cheapest trans-Tasman fare of $lBl with the New Zealand budget fare. The re sulting fare, $762, would ena ble Australians to travel to the US and back for a saving of $lBB.

Again, Canberra gave the thumbs down. And there the matter rests for the moment.

It’s ironic that the low-fare initiative has been stalled in Australia because it was Can berra’s reaction to Freddie Laker’s plans for cheap fares on the Kangaroo route that in fluenced Pan-Am to propose its budget fare concept.

Responding to the Laker move. Transport Minister Peter Nixon said the Australian Government would welcome any form of innovative low fare, Airline fares are frequently described as confusing, com plex and irrational, and some times they are. Pricing is a deadly serious matter in any business. However, the budget fare is none of these things, Here’s how it works.

A passenger simply buys his ticket 21 days in advance nominating the week in which he wants to travel. The airline comfirms the exact date and flight number at least seven days before the start of the week nominated.

Pan-Am designed the budget fare to fill seats that otherwise would go empty on the basic theory that in the airline business it’s easier to make money and, at the same time, give the public a break on.fares when aircraft fly full.