Air-Fare Control

Report Outline
Airline Travel Costs in Flux
Growth of Air Passenger Industry
Proposed Ways to Avoid Fare Raises
Special Focus

Airline Travel Costs in Flux

Official and Consumer Reaction to Higher Fares

Like everything else, the cost of air travel has been going up and up. In the past year, scheduled domestic airline fares have risen more than 20 per cent and trans-Atlantic fares are up 35 per cent. A number of discount fares, including those for youth and families, have been abolished. Higher fares have led to reduced air travel, and the cost of operating half-empty planes has, in turn, led the airlines to propose further fare increases.

In recent months, this vicious circle of higher fares and passenger declines has encouraged many airlines to apply to the Civil Aeronautics Board (Cab) for a number of discount fares to attract more passengers. The Cab has the authority to approve or disapprove fare increases or reductions and route changes proposed by scheduled domestic airlines. And it exerts strong influence over commercial aviation around the world; the board holds veto power over routes and fares designated by the International Air Transport Association (Iata), a body of 110 international airlines.

The board has been subjected to strong criticism recently over the upward costs of both domestic and international air travel. It has been accused of an airline industry bias—that it agrees too readily to airline proposals that discourage competition and encourage fare increases. Criticism has come from liberals and conservatives, Ford administration officials, members of Congress, consumer groups and some airline spokesmen. The Justice Department and the Federal Trade Commission (Ftc) have argued that fare reductions are needed to spur passenger travel, and the Transportation Department proposed in January that the board reduce fares by 10 per cent.