Officials of almost 60 international airlines agreed yesterday to press this fall for passenger fare increases of 7 percent on most routes, including the heavily traveled transatlantic.
The agreement was reached by members of the International Air Transport Association at a two-day fare-setting conference in Geneva.
British Airways Group Managing Director Roy Watts, who chaired the meeting, said the increases, which are expected to add $2 billion to the airlines' coffers next year, were the largest the airline executives felt the market would bear. Before the meeting started, IATA officials had suggested that fares would have to be boosted by between 15 percent and 20 percent to stem industry losses.
Watts said the increases do not apply to flights to Japan or within and between North and South America. Otherwise, the increases, to take effect Oct. 1, are "almost completely across the board," he said.
The fare increases generally are subject to the approval of the relevant governments--in most cases, a pro forma exercise, since many of the airlines are government-owned.
Japan was exempted from the increase after Japan Air Lines adamantly opposed any increase, Reuter news service reported, adding that Japan has yet to implement a 5 percent increase decided last year.
Suggesting that the increases would not offset a shortfall expected by the airlines next year, Watts said the fares "were under review" and could be raised again as early as November. In March there was a 7 percent increase in North Atlantic fares.
IATA members also discussed ways of clamping down on discounting tickets. In Great Britain especially, airlines sometimes unload "regular fare" tickets on partially filled flights to discount travel shops. The tickets are then sold to consumers at significant discounts.