A SAVAGE PRICE WAR has broken out on the newly liberated Orly-Toulouse route between French state-owned carrier Air Inter and private domestic airline Air Liberte.
On 5 January, Air Inter launched a Fr450 ($84) return "super leisure" fare between the two destinations, cutting its own standard fare by more than two-thirds and undercutting Air Liberte's inaugural promotional fare by Fr100. The latter replied with a Fr360 offer, which was immediately trumped by Air Inter with a Fr280 fare (valid until the end of this month).
It is the first time that airlines have been able to conduct such a fare war within France, and is the direct result of the battles in 1994 between the European Commission (EC) and the French Government over liberalisation of air transport within the country. Orly-Toulouse is one of the most profitable routes in France, and Air Inter's previous monopoly is now being contested by two airlines, Euralair having now been given the go-ahead to begin operations.
Air Liberte has now launched two formal complaints, one to the French Government demanding that Air Inter provide similar fare cuts on its other domestic routes, the second to the European Commission, demanding the immediate termination of the Fr20 billion aid plan to Air France, because the EC's conditions on opening up of internal routes to competition "...have still not been realised".
Air Inter rejects Air Liberte's action, saying that it is free to offer promotional fares if it wishes.
Source: Flight International
