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Air Fares: Unapproved Rates

Volume 414: debated on Tuesday 11 November 1980

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2.54 p.m.

My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.

The Question was as follows:

To ask Her Majesty's Government whether the sale of reduced air tickets by thousands of travel agents, besides being in breach of IATA regulations, is an infringement of any other regulation, or of the law.

My Lords, the law is complex, but in general either an airline or agents selling tickets at an unapproved rate would be committing an offence. The detail is set out in paragraphs 15 to 21 of the report of the Working Party on Discounted Air Fares published in 1978. The working party also rightly noted that the best interests of all will be served by encouraging in every way the expansion of legitimate low fares, and we are seeking to persuade our European partners, for example, to allow lower fares to meet the needs of all classes of travellers.

My Lords, while thanking the noble Lord for that Answer, may I ask him what the Government intend to do, or what they can do? What is happening at the moment is that the legitimate travel agents who obey the law, or the rules laid down by IATA, are rapidly losing their clients because what they call the bucket shops are getting tickets from the very airlines who are, under IATA, suggesting that this should not be done. In fact, they are being undermined by the very people who they want to protect their own rules.

My Lords, the fundamental way in which we seek to correct this difficulty is, as I said in the main Answer, by encouraging and promoting a reduction in real terms of air fares right across the board. It has in the past proved very difficult to obtain sufficient evidence to secure a conviction in a matter such as this, but I cannot say that that will not happen in the future.

My Lords, in order to clear up the complexity of this matter, is it not correct that the airlines employ two different types of retailer, one, the legitimate agents who have to sell tickets at published fares, and, secondly, the bucket shops, who receive tickets from these same airlines which they then sell under the counter? Secondly, if there is the surplus capacity available that we hear so much about today, and discounted tickets have to be sold by the airlines to fill that capacity, could these not be sold over the counter by the legitimate agents?

My Lords, as the noble Baroness will know, there has been a steady decline, in real terms if not in cash terms, of fare levels recently, particularly, for example, on the North Atlantic routes, and I do not think it is an exaggeration to say that the heyday of the bucket shops, as they are called, is over. How the bucket shops come by their supply of tickets is not always clear, but the airlines for the most part deny that they are responsible.

My Lords, would my noble friend agree that there are many people who think that IATA is not a panacea of good for all travellers, and perhaps it might be better if it were totally abolished?

My Lords, in view of the over-employment of both the courts and the prisons, could they not be let off dealing with people who merely try and get us things cheaper?

My Lords, that is an interesting thought, but the fact remains that it is the duty of the courts to try offenders who are properly prosecuted.

My Lords, can the noble Lord tell us if the selling of these tickets in any way impinges on the Government's approval of the international fares structures agreed between the designated operators under the Bermuda formula?

My Lords, international air fares are agreed between the two Governments involved. In the case of traffic between the United Kingdom and the United States, which is governed by the Bermuda 2 Agreement, as it is called, a fare provision is included in that agreement.

My Lords, is it not correct that the air tickets must come from somewhere, and would it not be a good idea to set up a Select Committee under the noble Lord, Lord Boyd-Carpenter, to get this matter sorted out and dealt with?

My Lords, the tickets do indeed come from somewhere, but I am sorry to say that a good many of them are stolen.