The proliferation of discount fares and their understanding by the regulators, or for that matter, by the travelling public, is one of the most complex, if not bewildering aspects of today's airline industry. You may consider it presumptuous for me, representing an aeroplane manufacturer, to comment on airline fares policies. However, as part of an industry directly affected by whether or not airlines are profitable, we are very ‘interested parties'. This interest has invoved us in many discussions with airlines, as well as in Boeing-sponsored studies to understand discounted fares and the basis for their being profitable or unprofitable. Low fares, of course, are only one aspect of a rapidly evolving air transport industry—one which is seeing a new regulatory environment in the United States, new forms of bilateral agreements, and a whole host of fresh marketing ideas.

'Low-Fares’ is a misleading term. Low compared with what? It certainly implies change. Perhaps ‘lower’ fares are what the debate is all about. There are tourism as well as aviation conditions.

Fares are vital to tourism. A quarter of a century of low fares has supported the world tourism boom, making tourism the biggest single factor in world trade, and produced a growth rate of 8-9%, considerably higher than that for world trade as a whole. In particular, the trans-Atlantic fare revolution is not new.

The journal of the ITA gave an illustration of this, comparing a package tour New York/Rome for Holy Year 1950 priced at $585 and the same offer for the second Holy Year 1975 at $580. Taking into account the equivalent dollar purchasing power, the 1950 offer represented a price of $1400. ‘Eternal bliss', said the ITA reporter, ‘at half the price!’

Tourism is both a growing industry and is also an increasingly competitive one. It has become an important factor in the social and economic life of this country, but it is the international visitors who form the growth sector in the market and make the greatest contribution to the national economy. In 1977 the United Kingdom attracted 4·7% of the world total of international travellers and its share of the growing world market has increased by half over the past 10 years. Figures from the Department of Trade show that in 1977 tourism was third in the league of invisible exports and seventh overall in export earnings.

If the advent of cheap air fares is to lead to a tourist ‘explosion’ then the effects are likely to be dramatic in terms not only of the tourist industry but the social life of places visited as well as on the national economy. As the foremost tourist centre in Britain, London will feel the effects soonest and most dramatically. While this provides very welcome opportunities, the social and economic implications are far-reaching and need to be carefully considered.