HC Deb 10 March 1978 vol 945 cc829-30W
Mr. Trotter

asked the Secretary of State for Trade why he believes it to be in the interest of passengers to require transatlantic operation of scheduled services to charge more than the fares acceptable to the United States Government; and, in particular, why he objected to the lower fares proposed by Braniff Airlines.

Mr. Clinton Davis

The Bermuda 2 Agreement, signed on 23rd July 1977, provides that fares must be approved by both the United States and United Kingdom Governments and not unilaterally imposed by one party on the other. The Government have supported low-cost fares on an experimental basis on the London-New York route but believe —as did the United States Government—that their effects should be examined before any more general application is considered. These experimental fares have been available for merely five months and the United States authorities have permitted Skytrain to operate only on a 12-month trial basis. The Government believe that it is imperative to ensure that airlines profitability is not so adversely affected as to impair long-term considerations of efficiency, safety and the ability to invest in new and quieter aircraft, these considerations being of vital importance to the consumer as well as those interested in the well-being of the airline industry.