AIR FARES (Hansard, 5 April 1960)

§ 74. Mr. CHETWYND
To ask the Minister of Aviation whether he will now make a statement on air fares.

§ 75. Sir A. V. HARVEY
TO ask the Minister of Aviation if he intends to approve the new International Air Transport Association fares; if he will now announce his decisions about the outstanding very low fare applications on cabotage routes; and what proposals he has for safeguarding the interests of independent operators who have been providing colonial coach services.

§ 76. Wing Commander BULLUS
To ask the Minister of Aviation if he will now make a statement of his intentions regarding the proposed new International Air Transport Association fares.

§ 77. Mr. BURDEN
TO ask the Minister of Aviation what fare adjustments are likely as a result of his recent negotiations with civil aircraft operators.

§ The Minister of Aviation (Mr. Duncan Sandys)
With your permission, Mr. Speaker, I should like to answer Questions Nos. 74, 75, 76 and 77.
At its annual conference in Honolulu, last autumn, the International Air Transport Association settled the new rates of fares for services in Europe, between Europe and South America, and between North and South America. However, the conference separated without reaching agreement on fares for the rest of the world. This was due largely to the demand for the introduction of cheaper fares, put forward by B.O.A.C, in agreement with Her Majesty's Government.
The conference having thus broken down, I announced last December that I had decided, in principle, to authorise B.O.A.C. to reduce its fares on our British cabotage routes to the West Indies, Africa and the Far East, for which international agreement is not required.
Thereupon the International Air Transport Association decided to reconvene its conference. Subject to some increases in certain first-class rates, it has now, with effect from 1st October, agreed to general reductions in the cheaper class fares. The new economy class fares will be up to 16 per cent. below the present rates for the tourist class. These reductions do not go as far as B.O.A.C. proposed, but this is a welcome step in the right direction. I have now formally approved these new fares; and I have authorised similar economy fares on the main British cabotage routes.
Subject to clearing up some outstanding points with the colonial Governments concerned I have, in addition, decided to authorise certain new classes of fares on our British routes, at very much cheaper rates. These will include special low fare services to East Africa, Central Africa, Aden, Bermuda, the Bahamas, the West Indies, Singapore and Hong 195 Kong. The new fares will be lower than the colonial coach fares, where these now exist, and will be between 25 per cent. and 30 per cent. below current tourist rates. On these routes I propose also to authorise still cheaper fares for inclusive tours. Special rates will also be introduced for students travelling in off season months. These will be between 40 per cent. and 50 per cent. below present tourist fares.
Unless some special action were taken, drastic reductions of this kind by B.O.A.C. would completely undermine the cheap air services which the independent airlines have built up. I therefore asked the Corporations and the independent companies concerned to discuss the problem and see if they could not work out together some mutually satisfactory arrangements. These discussions have resulted in agreements which will, I am sure, prove beneficial to the Corporations and the independents, as well as to the travelling public.
Airwork and Hunting Clan, now to be known as British United Airways, will share with B.O.A.C. the economy class and third-class services to East and Central Africa. The Eagle airline, in which the Cunard Shipping Company have acquired a majority holding, will operate services of all classes between Britain and Bermuda, in parallel with B.O.A.C. Partnership arrangements have likewise been made between B.E.A. and Skyways on the London—Malta route and between B.E.A. and British United Airways on the route between London and Gibraltar.
The House will, I am sure, welcome these agreements between the Corporations and the independents, which will, I hope, lead to fruitful co-operation in the years ahead. It will also, incidentally, dispose of some of the most controversial issues with which the new Licensing Board would otherwise have had to grapple.

§ Mr. Chetwynd
Is the Minister aware that this move to get lower fares will be very welcome on this side of the House and that it will bring air travel within the reach of many millions of people in future? Can the right hon. Gentleman say whether he proposes to have a differential between jet aircraft and propeller-driven aircraft? Will the 196 I.A.T.A. fares rest for one year, or will B.O.A.C. still press for reductions in line with what the Corporation had in mind to begin with? In the case of shared routes, can the right hon. Gentleman say whether the Corporations feel that they are adequately safeguarded?

§ Mr. Sandys
There are certain differences between the jet and the other services. I will let the hon. Member have particulars.
In answer to the hon. Member's question about pressing for further reductions, I have no doubt that if the new reduced fares prove successful B.O.A.C. and other airlines will hope to get further reductions in future years.

§ Sir A. V. Harvey
Is my right hon. Friend aware that most people who are interested in this matter will congratulate him personally upon the part that he has played in bringing the Corporations and the independent operators together? Is he aware that what he has done will do a great deal for British civil aviation and transport generally?

§ Wing Commander Bullus
I join in the general congratulations extended to my right hon. Friend. Will he consider circulating in the OFFICIAL REPORT a table setting out the new fares?

§ Mr. Sandys
I do not think that I can circulate all the new fares, but I will gladly circulate some typical examples.

§ Mr. Strauss
So as to get some idea of the consequences of the agreements arrived at between the Corporations and the independent airlines, and to see whether special benefit has gone in any direction, will the right hon. Gentleman publish the agreements which have been reached? [HON. MEMBERS: "No."] As the Corporations are public concerns and the matter is very much one of public interest, will the right hon. Gentleman undertake to publish the agreements made between the Corporations and the independent airlines?
We are fairly well aware of the agreements which have been made between the Corporations and the national foreign services, and there seems no reason why we should not have information about these internal agreements.

§ Mr. Sandys
I do not think that the right hon. Gentleman is correct in saying 197 that the agreements between the Corporations and the foreign or Commonwealth airlines have been published. These are commercial agreements, and it would certainly not be proper for me to publish them. If the companies concerned and the Corporations wish to publish them, that is their affair.

§ Mr. Strauss
I take it that the right hon. Gentleman would have no objection to their publication, as it is plainly in the public interest that we should know what has happened. Will he at least support any suggestion that the contents of these agreements should be known?

§ Mr. Sandys
I certainly would not interfere with any wish that might be arrived at between the Corporations and the companies concerned.

§ Mr. Burden
Can my right hon. Friend say whether the new low fares will dispose of the applications for very low fares and, if so, whether this is a result of the arrangements between the independents and the Corporations?

§ Mr. Sandys
The independent airline companies who put forward these pro-

§ Mr. Chetwynd
Can the Minister say whether the Corporations agreed to these proposals in full, and what effect the agreements will have in diverting traffic from the Corporations to the independents?

§ Mr. Sandys
There are two questions here. The first concerns the arrangements between the Corporations and the Companies, and the other concerns the new fares. The new fares were discussed by the Corporations, the colonial Governments concerned and myself, and complete agreement has been reached on them. I asked the Corporations and the independent airlines to discuss the arrangements together, and they have come to these agreements among themselves.

Several Hon. Members
rose—

§ Mr. Speaker
We cannot debate this matter at Question Time.

EXAMPLES OF REDUCED RETURN FARES ON BRITISH CABOTAGE ROUTES APPROVED WITH EFFECT FROM 1ST OCTOBER, 1960
Between London and	Current Tourist Class Fares	New Reduced Rates (Percentage reduction below current Tourist rates shown in brackets)
Economy Fares	New Low Fares
Bermuda	…	…	…	£219	£180(17%)	£153(30%)
Bahamas	…	…	…	£232	£190(18%)	£162(30%)
Jamaica	…	…	…	£253	£212(16%)	£176(30%)
Aden	…	…	…	£218	£184(16%)	£153(30%)
Nairobi	…	…	…	£234	£196(16%)	£166(30%)
Salisbury	…	…	…	£265	£221 (16%)	£185 (30%)
Singapore	…	…	…	£364	£328(10%)	£274(25%)
Hong Kong	…	…	…	£416	£374(10%)	£311(25%)