Air fares set by Govt, not I.A.T.A.

Press, 15 April 1978, Page 6

Air fares set by Govt, not I.A.T.A.

By

LES BLOXHAM,

travel editor

Air New' Zealand could save about $200,000 a year in membership fees if it withdraws from the International Air Trans-port Association. But being a non member will not pave the w'ay for the airline to cut fares as was suggested in a newspaper report from Auckland yesterday. Governments — not LA.T.A. — have the final say as to whether a fare is acceptable or not, and sometimes they have the first say.

When Pan American Airways announced its plans for new low-cost budget fares across the South Pacific, the New Zealand and United States Governments ulti[mately approved them long before the total package was given I.A.T.A.’s blessing. However, in spite of this official approval, the Australian Government has not only refused to recognise the new fares, but has also banned the advertising of the New Zealand-United States budget plan in a determined bid to stop Australians flitting across the Tasman to pick up the cheap flights in Auckland. The airlines of both Australia and New Zealand are among those in the world that have enjoyed the protection of I.A.T.A.’s fare-making! machinery. But in recent years its effectiveness has been weakened by the unilateral action of some governments in approving lower fare structures.

According to a Press Association report from Auckland, the general manager of Air New Zealand (.Mr M. R. Davis) said he had been concerned for some time about delays and a lack of flexibility within I.A.T.A. “We are the airline of a small country and we are

fighting in a big, tough market,” he said. “We would be remiss if we didn’t look at the benefits of leaving.”

He declined to be drawn on the problems of working within the I.A.T.A. framework, but said the arrival of a second United States airline (Continental) in New Zealand was a matter of “great concern.” Continental is one of the few American airlines which is not a member of I.A.T.A. According to the report, Mr Davis sees this as giving the airline greater room for manoeuvring on special fares and “extras” for passengers. I.A.T.A. airlines nevertheless can seek dispensation co provide the same “extras" as their non-I.A.T.A. comnetitors. For instance, Pan Am (one of I.A.T.A.’s biggest I members) on its Hong Kong - Japan services and Air New Zealand between Auckland and Singapore, give their passengers free drinks and headsets as do their fellow travellers who fly on the nonI.A.T.A. Singapore Airlines. Mr Davis agreed that there were penalties to be considered if the airline did leave the association. It would lose membership of the valued clearing house which sorts apportioned revenue from the complicated mixing of airline ticketing. The airline would also lose the association’s legal and technical services and the weight the international body carries in world affairs, fuel buying, and the purchase of accessories. It seems unlikelv, therefore, that the airline will seriously consider withdrawling. In fact, it probably is a I little embarrassed by the pro-

minence given Mr Davis’s remarks.

“Undue emphasis has been placed on what were really just the thoughts of the general manager,” said the airline’s director of public and corporate affairs (Mr Craig Saxton) last evening. And what does I.A.T.A. think about it all? "I am very surprised — I thought our relationship with Air New Zealand was a good one,” Mr Roy McGowan, the association’s Asia and South Pacific regional director, assured me. Mr McGowan, who is based in Singapore, has been attending a conference in New Zealand.

“I spent quite some time with Mr Davis the other day and he certainly didn’t express any dissatisfaction or say he was thinking of pulling out,” he said. "It’s news to me.”