The Justice Department cleared the way yesterday for low winter fares on big-name airlines between New York and London when it told British Airways that it "has no intention of instituting [antitrust] enforcement action" if the British carrier lowers its fares.
The Justice business review letter was in response to a request from British Airways, which has been curiously blocked by its own government from implementing lower fares because of concern that action might be considered predatory by the United States.
With that resolved, British Airways is free to seek formal approval for a low-fare schedule from the U.S. Civil Aeronautics Board and the British Civil Aviation Authority. If that happens, U.S. airlines probably will follow quickly to match the fares, as they are entitled to do by treaty.
"We are gratified by the Justice Department decision," said British Airways spokesman John Lampl. However, he said, British Airways has not decided "what our next move will be. Watch this space."
The lowest fare in the package British Airways proposed to Justice is $378 for a round-trip on weekdays, a $201 savings over its current lowest fare. If the British decide to lower their fares, treaties require them to permit U.S. airlines to match the fare.
"We will be competitive," said Merle Richman of Pan American World Airways.
"If one of our competitors decides to introduce a low fare, TWA will be right on top of it," Trans World Airlines spokesman David Venz told the Associated Press. "Right now, with traffic continuing to be strong, there is no incentive to introduce a lower fare."
British Airways, Pan Am and TWA all advertised lower winter fares earlier this year pending governmental approval and sold tickets at those prices. When the British withheld approval because of concerns about U.S. antitrust laws, irate travelers were left with invalid low-price tickets. A U.S. Civil Aeronautics Board source said, however, that most of those ticket-holders were able to work out their problems with the airlines on an amiable basis.
Two cut-rate airlines, People Express and Virgin Atlantic, already charge cheaper fares than the one that British Airways proposed. They operate flights between Newark and Gatwick instead of the more popular Kennedy and Heathrow airports.
The lower fares, Justice said, would violate antitrust laws only if they were adopted in concert with competitive carriers. They would be predatory, Justice said, only if they were shown to be below cost. British Airways submitted documentation to show that the fares exceeded costs.
This is the latest chapter in the long-running question of whether the United States can extend the freedoms of deregulation and the penalties of violating its antitrust laws to foreign airlines. In November, President Reagan ordered Justice to call off a year-long grand jury inquiry into possible criminal antitrust violations by airlines flying between the United States and Britain.
However, two civil suits that address part of the same question remain. The suits charge, essentially, that many of the North Atlantic carriers lowered their fares to drive now-defunct Laker Airlines out of business.
In a related occurrence in one of those suits, Federal District Judge Harold H. Greene yesterday permanently prohibited British Airways and British Caledonian Airways, two of several defendants, from taking steps that would "impair or otherwise interfere with the jurisdiction of this court" over the suit.