Air Tickets: Discount Sales (Hansard, 10 December 1980)

§ Baroness Elliot of Harwood
My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.

§ Lord Trefgarne
My Lords, our work in this field consists of bilateral action where we have the power and opportunity, and multilateral action principally within the European Community to persuade our partners of the need for a more liberal régime. Some success has been achieved on the North Atlantic to Hong Kong, and to certain destinations in Europe.

§ Baroness Elliot of Harwood
My Lords, I thank the noble Lord for that reply. Does he not think that it really is most unfair and altogether dishonest to allow and encourage, as some of the airlines do, the selling of tickets in the "bucket shops" because they cannot sell them through the ordinary channels? Surely it would be better to get IATA to change the arrangements, so that tickets can be sold perfectly genuinely at whatever price they are worth. We had a good example on the railways the other day with the "granny" tickets. If that had been done dishonestly, by people who were not interested in honest-to-God railway traffic, there would have been a tremendous row. I hope that the noble Lord will do something about the unfairness to people who keep to the rules as laid down by IATA.

§ Lord Trefgarne
My Lords, my noble friend asked me a question a week or so ago about the prospect 724 of effective prosecution for offences, if offences there are in this field. I explained to her then the difficulty of securing sufficient evidence to ensure that the prospect of a successful prosecution was reasonable. I am afraid that is still the situation. Essentially, IATA is a trade association. It is not possible for a Government to impose their views on the members of that association.

§ Baroness Burton of Coventry
My Lords, I joined in a week or so ago. I was not after prosecutions then and I am not now. May I ask the Minister why the Government will not say that they no longer accept the IATA ruling that legitimate agents should not sell discounted tickets?—because that is the first step. Secondly, is the Minister aware that on 30th September last British Airways said on television that they sold these tickets to the "bucket shops"? As the Minister will be aware, other scheduled airlines do so. Why is it that the Government take refuge in talking about prosecutions and the difficulty of securing convictions when it is known that these tickets are available, that the public wants them and that the airlines have to sell them? Why can they not be made available at all retail outlets?

§ Lord Trefgarne
My Lords, I absolutely agree that the long term, if not the medium term, solution to this matter is to achieve a proper régime of lower air fares. That is the policy which we are pursuing and that is the area in which we have had some success, as I have already described. It is not the case that airlines have cheap tickets and high priced tickets to sell. The blank ticket, which is the document causing the difficulty, does not precisely state which fare is to be charged. That depends upon the booking arrangements between the travel agent and the passenger. As I said on the last occasion when we discussed the matter, some tickets have been stolen, others are supplied by the airlines in the expectation that they will be used for the correct fare, while on the other occasions there is genuine misunderstanding about what the correct fare ought to be.

§ Baroness Burton of Coventry
My Lords, I do not wish to be rude, but this is a complete blockage to taking action. The tickets are there and the Minister knows that they are there. Is he aware that they are sold by the scheduled airlines to the "bucket shops"? Why are the Government not prepared to say that they will no longer accept the ruling banning the legitimate agents from selling them?

§ Lord Trefgarne
My Lords, the fares between any two points are agreed by international agreement between the two countries concerned. It is not open to the British Government to lower fares unilaterally on any international route; we have to achieve agreement with the other Government concerned. Unfortunately, that is not always possible.

Lord Inglewood
My Lords, the term "bucket shop", which is no compliment, is being bandied around. Can the noble Lord tell us what is the difference between a "bucket shop" and a legitimate retail outlet, so that the simpler of us know when we go to buy an air ticket exactly what we are doing?

Lord Trefrarne
My Lords, I hesitate to offer a legal definition of the difference, but what is referred to in the Question are those places where you can buy tickets at other than the correct fare.

§ Lord Segal
My Lords, is it not a fact that many of these scheduled air services run at barely one-third of their capacity, that on many lines the economy fares could be reduced by two-thirds of their existing rates and that still the company would show a profit? Is this not, to say the least, an undignified way for a national airline to conduct its business?

§ Lord Trefgarne
My Lords, I absolutely agree that the level of fares on very many routes is too high. Our policy is aimed at securing a lowering of those fares where, as I have said, they are high. As I have also said, we have achieved some success in that field. In the meantime, we have to be certain that the bilateral agreements which we have agreed to are upheld.

§ The Earl of Kimberley
My Lords, would not my noble friend agree that IATA is one of the reasons for higher fares—a question which I asked him a few weeks ago? Is it not high time, therefore, that IATA was done away with?

§ Lord Trefgarne
My Lords, IATA is a trade organisation of the airlines concerned. My noble friend ought therefore to put his question to the airlines.

§ Lord Polwarth
My Lords, in pursuing his efforts, would the noble Lord bear in mind that among the worst offenders in failing to produce cheap air fares are the two state-owned airlines of this country and of Canada on the British-Canadian run who, sharing the run between them, have failed to produce virtually any cheap fares, in contrast to the United States routes from this country?

§ Lord Trefgarne
My Lords, the difficulties on the Canadian route result from our failure to persuade the Canadian Government—not necessarily the airlines concerned—of the need to reduce fares.

§ Baroness Burton of Coventry
My Lords, may I just ask this question, because the Minister did not answer what I asked him: Is he aware that I said nothing at all about fixing fares between the two countries concerned? I asked him why these discounted tickets cannot be made available at all outlets if the Government would only say, "We can no longer accept the IATA ruling that this is not so "? It is nothing to do with bilateral agreements between different countries.

§ Lord Trefgarne
My Lords, the noble Baroness is normally so well informed on these matters that I am surprised she advances that argument. The fact of the matter is that fares have to be agreed between the two Governments, whatever IATA says.