§ Mr. Trotterasked the Secretary of State for Trade why he believes it to be in the 429W interest of passengers to require transatlantic operators 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. Dell, pursuant to the reply [Official Report, 10th March 1978; Vol. 945, c. 829–30], gave the following information:
Negotiations held in Washington between civil aviation delegations of the United Kingdom and the United States were concluded on 17th March. They resulted in an agreement on the introduction of new experimental low fares on a number of United States and United Kingdom routes in addition to London/New York under conditions acceptable to both countries. A new charter deal, which completes the Bermuda 2 Agreement, was also negotiated.
The new fares agreement contains provisions vital to the United Kingdom, namely, that the conditions of competition as between United Kingdom and United States airlines shall be equal. In particular, the so-called "add-ons" for points behind and beyond the gateways involved will be the same for each side. This was one of the outstanding issues between us and the American airline Braniff, which included in its original fare proposal trivial "add-ons" from points behind Dallas which would not have been available to British Caledonian Airways on its service from Houston. This has now been rectified. In addition, capacity restrictions will be filed and approved for a number of the routes. The results of this new low fare experiment will be reviewed in the autumn. Our European partners and Canada will be included in the review, and as well as bilateral United Kingdom and United States consultations, a multilateral meeting is envisaged in Ottawa for late November.
The new charter deal offers travellers and airlines much wider opportunities. Indeed, the agreement could have been still more liberal by allowing scheduled services to carry some passengers on charter terms in return for a percentage of what is called "fill-up" on charter services. Unfortunately, there were last-minute objections from the United States charter carriers, who obviously felt that they could not stand the competition in- 430W volved. Our charter carriers, however, were ready. The new provisions last at least two years and give much-needed stability to the market.
The new fares arrangements and the charter provisions, taken together, will increase travel between our two countries. Total traffic last year was roughly 4 million passengers, both scheduled and charter. We estimate that this will rise to over 4½ million this year, and the importance of London as the premier European gateway from the United States has been maintained.
I echo the words of President Carter that the new arrangements demonstrate that we can work out difficulties with our most important aviation partner to the mutual benefit of airlines and consumers.