EC to Allow Air Fare Cuts Within Europe

The European Community agreed Monday to allow cheaper air fares in Europe, where ticket prices are among the highest in the world.

“Immediately, ordinary people will begin to get a squarer deal than they had before,” said EC Transport Commissioner Stanley Clinton Davis after the 12-nation bloc’s transport ministers approved the package in Brussels.

British Transport Minister Paul Channon, however, said he did not expect fares to be cut as soon as the treaty took effect Jan. 1, because airlines would still be applying winter schedules and tariffs.

Channon called the agreement a milestone for the EC’s heavily regulated air sector. “No longer will two airlines be able to operate a cozy cartel and monopolize a route,” he told reporters. The EC’s Executive Commission has been fighting to break up such cartels, which are widely blamed for inflating Europe’s air fares.

The current deal will reduce governments’ powers to restrict competition between scheduled airlines, giving carriers greater freedom to fix prices independently and expand their business on routes shared with rivals.

Governments will be obliged to let airlines offer discount fares as low as 45%of the standard economy tariff, although such discounts would still be tied to a number of conditions.