TRAVEL: What a Little Competition Can Do

Ask a member why he belongs to his favorite cartel, and he most probably will answer that he would go out of business if competitors could undercut his prices. That has been the standard defense put forth by the International Air Transport Association (IATA), the industry group that sets fares for overseas travel on scheduled flights. Still, it is amazing what a little competition can do.

Take the case of Laker Airways.

That is the non-IATA creation of Freddie Laker, the fast-talking Briton who has long been trying to crack lATA's monopoly on scheduled service between London and New York City by offering a daily, no-frills, nonreservation shuttle service at a round-trip price of just $236 (v. $631 for a 14-21 day summer excursion fare). IATA members vehemently opposed him, warning that his "Skytrain" service would hurt the scheduled carriers on the New York-London run and compel them to cut their losses by curtailing flights on less profitable routes elsewhere. Well, surprise. Now that Laker has won permission from the Carter Administration to offer his walk-on shuttle service beginning in late September, his IATA competitors are not only preparing to meet him head-on but suggesting that the fight might help them and the industry as a whole.

The two American carriers on the New York-to-London run, Pan Am and TWA, intend to announce their own plans for Skytrain-cheap travel soon, perhaps next week. The plans will be closely scrutinized by other airlines, especially those flying the hotly competitive North Atlantic routes, where four out of ten seats are empty on an average scheduled flight. Though neither Pan Am's nor TWA's packages will be identical to Laker's, they will both offer just about everything Skytrain does, plus a few things more:

PICK-A-WEEK. Pan Am aims to match Laker's $236 round-trip price but not his no-reservations style. Instead, the airline plans yet another new entry in the ever growing list of advance-booking schemes. A traveler who wants Pan Am's bargain rate will have to make a reservation at least three weeks ahead of time and be prepared to put up with some uncertainty: he can choose the week in which he wants to leave, but the airline has until a week before the start of the selected period .to inform him of the exact date and hour of his flight. If he then decides not to go after all, he gets only half his money back.

SUPER STANDBY. TWA's proposal will evidently be in essence a modification of Laker's stand-by plan. The fare would be close to Laker's. But instead of having to purchase their tickets at the flight gate, Skytrain-style, bargain travelers on TWA would be able to buy them in advance, either from the airline or a travel agent. The ticket would be good for any flight, on a space-available basis; if no seats are available when the passenger wants to leave, he can try another flight or return his ticket for the full purchase price.