Opinion ID: 294004
Heading Depth: 1
Heading Rank: 1

Heading: the fare agreement

Text: 2 The International Air Transport Association (IATA) is a trade organization of domestic and foreign air carriers which are engaged in scheduled international air transportation. The member carriers periodically meet in traffic conferences to take joint action on matters of mutual concern, including types of fares offered to the public. These agreements, which take the form of resolutions, are subject to approval by the parent nations of the member carriers; in this country, the Civil Aeronautics Board has long asserted jurisdiction over IATA resolutions under section 412 of the Aviation Act, 49 U.S.C. § 1382 (1964). See generally IATA Traffic Conference Resolutions, 6 C.A.B. 639 (1946). The Board's approval of an IATA resolution confers antitrust immunity by virtue of section 414 of the Act, 49 U.S.C. § 1384 (1964); the rates contemplated by the agreements are then embodied in tariffs which are filed with the Board pursuant to 49 U.S.C. § 1373 (1964). On the other hand, if any member carrier's government disapproves an IATA agreement, or if the agreement otherwise expires, an open rate situation is created. When this happens, each carrier is free to set its own fares, subject, of course, to any limitations imposed by its government. Conflicts among nations as to appropriate fare levels must be resolved by diplomatic consultation; if this effort is unsuccessful, nations may exclude foreign carriers charging unacceptable fares. Thus, the danger that an open rate situation may disrupt harmonious international relations is obvious. 3 The resolutions presently in issue, which relate to fares offered between this country and Europe, are the product of a series of IATA traffic conferences held in Cannes, France and Dallas, Texas in 1968 and early 1969. In general, they were designed to be in effect for a two-year period terminating on March 31, 1971. The fare package itself is lengthy, complex, and esoteric, but for present purposes its salient features may be summarized as follows: 4 (1) Fare increases for individually-ticketed passengers were effected through elimination of the five per cent discount for passengers purchasing round-trip tickets. 5 (2) Contract Bulk Inclusive Tour Fares (CVIT's) — This set of fares provides for the sale of blocks of seats to tour operators, who will then retail them to the public as part of inclusive tours composed of ground accommodations as well as air transportation. 6 (3) Affinity Group Fares — These fares are available only to groups which are comprised of members of an organization existing primarily for purposes other than travel, and which satisfy other prescribed limitations. Fare levels vary with the size of the group, the season of the year, and the direction of travel. 7 (4) Incentive Group Fares — Like the CBIT's, the Incentive Group Fares are a promotional innovation. They are available to groups of a specified size which are composed of employees, dealers, or agents of a profit-making organization, and which are traveling under an established incentive travel program rewarding past work or encouraging future activity. 8 (5) Group Inclusive Tour Fares (GIT's) — These fares are available to groups of fifteen or more purchasing package tours from a tour operator; the tours must include a specified minimum expenditure for ground accommodations. 9 (6) California Proportional Fares — The IATA resolution also reduced the proportional fares, or amounts added on to the basic transatlantic fare, for passengers originating their flights in California rather than New York; proportional fares from other points outside of New York were not significantly changed. 10 The agreements embodying these fares were duly filed with the Civil Aeronautics Board early in 1969. 1