Air Transport World

Flag carriers flailed on fares. (air travel deregulation in the European Community fails to prevent high fares)

With the Third Package sealed and settled, aviation liberalization in Europe suddenly has started moving rapidly from a long-term talking shop to becoming a reality in just three months. So what's in it for the passengers? After all, they were the people the European Community Commission (ECC) had in mind when it started out to force down fares and open routes all those years ago.

Not a lot, on the fares front, if the ECC's track record so far is considered, and if the forecasts of the leaders of two of the most important passengers' organizations stand up.

On Nov. 1, 1990, getting into practice for full liberalization, the ECC brought a new fare regulation into force, which took the power to deny tariff increases away from the aviation authorities of the 12 member states.

Using the excuse that the Gulf crisis would result in massive increases in fuel prices - which did not happen, in fact - airline hiked their business-class fares furiously between year-end 1990 and end 1991. During that period, return fares from London rose 17% to Athens ($1,305), 23% to Copenhagen ($899), 24% to Madrid ($911) and 21% to Munich ($827).

The British Civil Aviation Authority complained to the ECC at the latter's headquarters in Brussels, but the commission took 12 months to consider the case and to agree that many of the fares indeed were too high. But by then, many of the fares had been replaced by even higher ones. At this writing, the ECC still was considering complaints about the second wave of increases - even though an additional year had gone by since they were referred.

"If the interests of the fare-paying passengers are important, this approach is misconceived," the CAA said. …

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