Business: Flying the Cheap Way to Europe

AMERICA'S annual tourist pilgrimage to Europe swings into high gear this week, and it will be bigger than ever—by far. One reason: a brush-fire price war has broken out among the airlines. They have cut the price of flights for "youngsters" aged twelve to 26 —and for "students" as old as 29—by more than 50% below the normal summertime economy fare. Under some circumstances it will now cost only $16 more to fly from the West Coast to Europe than to New York City. The price war is also bringing fares down to the level of those charged by the charter airlines. In response, at least one major charter carrier is planning to offer $100 round-trip flights from London to New York for "senior citizens"; the age limits are still uncertain.

The cutting started two weeks ago when the Belgian government ordered its state-controlled Sabena airlines to adopt a new "student fare" of $220 round trip between New York and Brussels. The action, an ingenious ploy to lure passengers to Sabena, has brought price competition to the cartelized International Air Transport Association. Like all members of IATA, Sabena is not normally permitted to raise or lower fares unilaterally—except in response to government orders. The rules also permit other airlines that fly the same routes to adopt similar prices in order to compete. Pan Am, the only U.S. carrier with direct service to Brussels, quickly followed Sabena and set an identical rate. Then the French government, fearing that the Belgian action would divert Paris-bound Americans to Brussels, promptly ordered Air France to introduce a $220 New York-Paris round-trip fare. This in turn permitted TWA, which flies into Paris, to do the same.

By week's end chiefs of most major European air carriers were imploring their governments to "order" new low fares. British Overseas Airways Corp. won approval of a $210 round trip between New York and London. Italy's Alitalia set a $199 New York to Rome round trip—887 miles farther than London—for $11 less. And Air France expanded the war to the West Coast by announcing a $362 round-trip fare from Los Angeles to Paris.

Student of What? On some carriers, even passengers under 26 years old have to be students in order to qualify for the bargains. But who is a student? Do only high school and university students make the grade, or can trainee hairdressers get the low rates as well? Not even the airlines know for sure.

An effort to make sense out of the great rate confusion will be made when the 108 IATA members meet in Montreal later this month to debate changes in all air fares. Though the price fight is already helping to fill the excess capacity created by the jumbo jets, the brutal competition could undermine the ability of IATA to protect its members from undercutting each other right out of business. Airline executives fear precisely that—particularly if the price war spreads to adult passenger fares as well. At week's end, some major airlines set plans for $200 round-trips from the East Coast for travelers of any age. Says Guido Vittori, Alitalia's general manager for North America: "Once a war like this is started, who knows where it will end?"