TRAVEL: What a Little Competition Can Do

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Pan Am's scheme would offer a measure of certainty for travelers who would not care to wind up loitering at the airport waiting for a seat—as they could under the TWA or Laker plans. But stand-by service might appeal more to those unable to make their reservations well in advance, as Pan Am will require. Unlike Laker, whose stripped-down service will not include meals, drinks or movies, both Pan Am and TWA plan to offer their discount passengers all the economy-class amenities, perhaps at a small surcharge over the Skytrain price for some of them. Also, both American carriers land at Lon don's convenient Heathrow Airport; Laker's planes use Stansted Airport, 45 miles from the city. During peak sea son (June 1-Sept. 14), Skytrain will fly eleven times weekly—and for the remainder of the year only once a day—but Pan Am and TWA have nearly twice as many daily flights. As with Skytrain, discount fares on the two American carriers will offer an unlimited length of stay before the return trip.

Is Freddie Laker concerned about his IATA competitors? No, to listen to him. Says he with a chuckle: "If Pan Am wants to dilute its earnings and go broke, why should I worry?" In fact, Pan Am seems likely to survive. After eight years of losses caused by a recession-induced downturn in international air travel at a time when it had spent heavily on new jumbo jets, the airline is now apparently on the mend and has reported its first profits for the month of May since 1968.

Although North Atlantic scheduled air travel was up about 9% for the first quarter of 1977, the increase would have been even greater had it not been for the stiff competition from charter airlines. Industry experts believe Pan Am's and TWA's experiments on the London route could show the scheduled carriers how to lure cost-conscious travelers without cutting into present economy-class revenues. After all, with more than a quarter of all Pan Am's seats between New York and London now being flown empty, every seat sold to a passenger who would not have gone at all without the cheap fare is money in the bank.