Japan to let airlines freely set int'l fares under ceiling+

TOKYO, Sept. 21 Kyodo -
The transport ministry plans to allow airlines to freely set international
airfares under a ceiling subject to its authorization, sources familiar with
the matter said Tuesday.
The deregulation will take effect starting with applications on Oct. 31, and
will be a boon to rapidly growing low-cost carriers, the sources said.
At present, airlines are usually required to obtain approval from the Ministry
of Land, Infrastructure, Transport and Tourism for international airfares 30
days ahead of flying at such prices. As a result, they cannot cut fares for
unsold seats even just before departure.
While low-cost carriers can change fares flexibly in accordance with
reservations and demand, the current Japanese fare system has hindered their
entry into Japan's aviation market.
Under the planned deregulation, upper limits on fares planned by airlines will
have to be authorized by the ministry for the sake of passenger protection, the
sources said.
The ministry will approve proposed ceilings in principle as long as they are
higher than barometer fares set by the International Air Transport Association.
But if a ceiling planned by an airline is so low that it is considered designed
to drive rival carriers out of the route, the ministry will not authorize it,
the sources added.
==Kyodo
2010-09-22 00:04:06