World airlines belonging to the International Air Transport Association agreed yesterday on a new round of increases in international passenger fares and cargo rates ranging from 9 percent to to 15 percent of offset rising jet fuels costs.
The increases, to be effective September 1, vary widely depending on route, direction and fare category, according to a statement issued in Geneva by IATA after the two-week-long negotiatiations ended.
The action by IATA members does not mean air fares and cargo rates will go up automatically by the agreed-upon amounts. The approval of the relevant governments is needed before any fare increases can go into effect,
Information on proposed fare increases on routes to and from the United States was not immediately availabele. Major U.S. airlines flying in-international passenger routes were noticeably absent from the meeting, with only National Airlines in attendance. Pan American World Airways dropped out of the world airline trade organization earlier this year, and several other major airlines -- Trans World Airlines, Braniff International, Eastern Airlines and United Airlines -- have taken advantage of IATA's recent restructuring to drop out of the rate-setting conferences and have decided to participate only in IATA's trade-assoociaton activities.
The U.S. airlines have pending various proposals for differeing fare increases -- some quite hefty -- with the Civil Aeronautics Board, which has made it clear it would like to see rate proposals filed independently.
Faced with proposed fuel-related increases, the CAB recently has been rejecting most proposed increases in the basic economy fares but approving rises in first-class and promotional -- discount -- fares. The board has been more favorable to proposed increases in normal econimy fares on routes linking countries that have signed liberal bilateral agreements with the United States that allow more competition.
For instance, last week the CAB said it would allow Eastern Airlines to raise first-class and promotional fares in the Carribbean markets by 7 percent, American airlines to raises it Caribbean first-class and discount fares between 2 and 17.5 percent, and Braniff to raise the same fares 5 percent over the North Atlantic in August. But the board said it wouldn't go along with increaces in Caribbean and transatlantic normal economy fares because of restrictive entry and pricing policies of foreign governments. It did allow Braniff to raise normal economy fares 5 percent to and from Germany and The Netherlands, however, since the United States has liberal air agreements with both.
Rising fuel costs have been of increasing concern to the airlines. IATA said yesterday fuel costs have doubled for some during 1979. Fuel costs were said to be an average of 18 percent of an airline's total operating costs last year, but are now 25 percent.
During the spring, airlines meeting under IATA's auspices agreed on an average 7 percent fare and cargo rate increase but officials said yesterday an average fare increase of about 5 percent was actually instituted after the various governments acted.
In a related matter, the CAB proposed allowing airlines greater flexibility in changing their domestic fares on short notice.
The board's proposal would allow airlines to file any fare reductions which does not raise significant questions of lawfulness on short notice, file fare increases that fall with the established zone of reasonableness on short notice, and match competing airline fares on 25 days' notice instead of the statutory 30 days.