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Aviation History
1978
1978 - 0500.PDF
904 FLIGHT International, I April I97B Air transport Stormy Atlantic summer forecast TRAFFIC growth on UK-USA routes this summer could be anything be tween 10 and 25 per cent, according to British officials, while revenue might increase by only one or two per cent compared with 1977. It is also thought possible that the US sup plemental carriers will be unable to compete with the lower costs of the British charter airlines, and that they will transfer capacity to other charter markets. It is now likely that resistance by European governments to the pro liferation of standby and budget fares beyond New York will collapse be cause of the risk of diversion of traf fic and tourism through Britain if they continue to hold out. The Nether lands has already accepted the US fares concepts in return for traffic rights into Los Angeles and one other point which it is free to select. In any event, it is unlikely that any of the European governments could resist the pressure which caused the British to concede defeat in their attempt to delay implementation of the new low fares. When the British negotiators arrived in Washington on March 6, they realised that the politi cal pressure on the US negotiators was such that the low fares could not be delayed. Early in the second week of Washington talks the British decided on a strategic withdrawal,'abandon ing their opposition to low fares and instead seeking "fair and equal oppor tunity" for British carriers. In view of the implacable US pressure for low fares, the UK negotiators are not too unhappy with the agreement even tually reached. Concessions which were won in clude US acquiescence in a limit on standby and budget capacity. There will be a weekly limit equivalent to 50 seats per flight for the summer season. The US has also agreed to prevent US airlines from offering cut- rate "add-on" fares beyond the inter national gateways. The US has also agreed to a bilateral review of the new fares with the British in October, followed by multilateral discussions with the major European Civil Aviation Con ference governments in Ottawa the following month. Rocky Mountain Airways has ordered a second de Havilland Canada Dash 7, for delivery in June. It has an option on a third aircraft for 1979 delivery and sees an eventual need for five Dash 7s The UK and USA have now reached agreement on a charter bilateral which will be incorporated into the Bermuda 2 agreement. As expected, the agreement is fairly conservative on the regulations for advance-book ing charter flights. Advance-booking period will be 21 days and minimum stay seven days. The charterer will be able to book late passengers, up to a limit of ten per cent of capacity, as substitutes for cancelling passengers up to five days before departure. Both US and UK carriers will have unrestricted rights to carry US- originating and UK-originating char ters. Dan-Air is already planning a move into the US market, and the British Government is confident that the British carriers, with their lower costs, will be at an advantage. The US supplementals are worried by this, but were even more con cerned when the American and British negotiators nearly reached agreement on trading 15 per cent "fill-up" (off- the-street sales) on charters against 15 per cent part-charter on scheduled flights. Briefed by the National Air Carrier Association, Senate aviation OLYMPIC AIRWAYS has announced signature of a letter of intent to buy two Airbus Industrie A300s, for de livery early next year, and will take options on three more of the type. The effect of the letter of intent, accompanied by a non-refundable de posit, is to> secure two early-1979 de- subcommittee chairman Howard Can non warned the Administration that part-charter would have "a devastating impact" on the supplemental carriers, on the North Atlantic. As a result, the US negotiators were told to abandon the proposal. Predictions of traffic and revenue growth on the UK-USA routes for the coming year vary widely, and there is no agreement on expected levels of profitability. • British Airways is preparing a definitive low-fare structure, and is dubious about the merits of the stand by fare. • British Caledonian is to introduce three-class service, on the same lines as its London-Los Angeles proposal, on London-Houston from April 14. Its 707s will be configured with 24 first- class seats, a 54-seat executive cabin and 48 thrift seats, and the full range of fares proposed for Los Angeles will be offered (see Air Transport for March 18). • Following the UK-US agreement, Braniff inaugurated Dallas-London ser vices on March 18 at the fares originally proposed by the airline. livery positions for the Greek carrier. New orders and confirmed options in the pipeline from existing A300 customers are likely to account for about seven more aircraft in the next few weeks. They include conversion of two more options by Thai Inter national. Olympic announces A300 intent
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