§ Mr. Colvinasked the Secretary of State for Transport if he will make a statement on his decision to reject the application by British Airways and other airlines to cut the winter's transatlantic air fares.
§ Mr. Michael SpicerOver the past few months a number of British and American airlines operating scheduled north Atlantic passenger services sought approval from the United Kingdom and United States Governments for permission to make significant reductions in a number of economy fares. When the fares were filed, Virgin Atlantic objected to them as being predatory.
In assessing the fares, the CAA therefore looked carefully at the economics of the proposals but concluded that in the context in which they were being offered, the fare levels appeared to be generally acceptable. Nevertheless, there was concern about the possible risk that, even with the approval of these fares by both Governments, British airlines could still be faced with United States anti-trust actions based on allegations of predation under United States anti-trust laws. Her Majesty's Government do not accept that such anti-trust actions would be consistent with Bermuda II, but in view of the current actions being pursued in the United States in connection with the collapse of Laker Airways it seemed prudent to seek reassurance from the United States Government that the proposed new fares could not be used as a basis for future anti-trust actions. The United States Government have not yet provided this reassurance.
I am naturally very disappointed that the lack of response by the United States Government to date deprives travellers of the benefits of these lower fares. I hope, 683W however, that the necessary reassurance will be forthcoming shortly in terms which will allow the airlines to refile their proposals.