Keeping Fares Aloft

Chances that travelers flying the North Atlantic on scheduled airlines will pay sharply lower fares this summer hit a hard downdraft last week. The U.S. Civil Aeronautics Board turned down proposals from British Overseas Airways, Lufthansa, Alitalia and Olympic Airways for new low fares between the U.S. and Europe. BOAC, for example, had wanted to charge only $179 for a New York-London round trip during the off season, and $290 during July. The fares would have been for a 14-to-45-day excursion booked 90 days before takeoff.

The CAB decision was welcomed by the U.S. transatlantic carriers, Pan American, TWA and National, which contend that they cannot match the fares proposed by the subsidized European lines. But the Europeans may retaliate by rejecting the Americans' proposal to charge $230 in the off season and $299 during June, July and August for the same service. So unless some compromise is found, the deadlock could lead to a continuation of present fares (minimum price: $313 round trip for 22 to 45 days in peak season, with no advance reservation) or even a rate war after the current international agreement on ticket prices runs out on March 31.

The impasse also dims the scheduled lines' hopes of slowing or stopping a drain of passengers to the cut-rate charter flights offered by the nonscheduled carriers. Last week one such line was advertising two-to-four-week round-trip fares between New York and London for as little as $179 in peak season. The scheduled lines had hoped that their new advance-fare service would enable them to come closer to meeting those prices, while also allowing them to plan operations so that they could cut costs by flying fully loaded planes. But weeks of effort by U.S. and European government negotiators to break the deadlock over just how little to charge for the new service have proved futile. Last week representatives of the International Air Transport Association, the scheduled airlines' rate-fixing cartel, began meeting again to make another try at reaching an accord.

Their deliberations are immensely complicated by the blunt fact that, heavily traveled as the Atlantic route is, there is still not enough business to enable all of the 2 1 scheduled and score or so of nonscheduled carriers flying it to prosper. Meanwhile, confusion over fares is soaring. Travelers planning spring and summer vacations overseas are being forced to make reservations without knowing just how much they will eventually have to pay, and thus what they can afford to spend on the ground.

As airline rivals jostle for command of the skies, the sinking popularity of sea travel is bringing an inexorable end to the graceful luxury ships that once plied the Atlantic in profusion. Last week the Italian cabinet announced that it intends over the next five years to remove from the North Atlantic route the last of its famous passenger liners: the Michelangelo, Raffaello and Leonardo da Vinci. The ships in 1972 cost the government $48 million in subsidies; on some recent sailings only about a fifth of the available space was booked. Unless the government can operate these vessels profitably on short-range cruises, they will probably be scrapped. When the Italian liners depart, only two luxury passenger vessels will be making regularly scheduled transatlantic voyages, the aging but still handsome France and Britain's jaunty Q.E. 2.

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