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Discount fares
of airlines
to be reviewed
Domestic airfares charged by Ansett and
TAA, which have been the subject of a recent
discounting war, are to be reviewed by the
Independent Airfares Committee.
Some domestic fares have been discounted by
between 30 and 40 per cent in the past few weeks
as the two major airlines battle for a share of the
dwindling passenger market.
The airfares committee, which is responsible for
approving ail airfares, will be required to ensure that
the discount fares are not subsidised by normal fares.
Announcing the review yesterday, the Minister for
Transport, Mr Hunt, said there had been "con
siderable interest" in the price of domestic airfares
and admitted that there had been conflicting claims
about the degree of cross-subsidisation between fares.
"I have requested the IAFC to undertake these
initial cost-allocation reviews in relation to services
provided by Ansett and TAA over all their routes
including the jet and F27 networks", he said.
This would cover the services of Airlines of
Western Australia and South Australia, Air New
South Wales and Airlines of Northern Australia.
The reviews were to be completed by June 30 this
year and would be held in public.
"I am confident that the review will develop
formulae which will provide an equitable basis for
future airfare determinations", Mr Hunt said.
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