Word: fared
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Dates: during 1960-1969
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...derives its power to approve or deny proposed air fares from the Federal Aviation Act of 1958. A crucial section of that act, and the one that Youth Fare appeared to violate, specifices: "No air carrier . . . shall make, give, or cause any undue or unreasonable preference or advantage or subject any particular person . . . or description of traffic in air transportation to any unjust discrimination . . . " (Italics added...
...twin tests of "reasonableness" and "non-discrimination" have become, after numerous CAB and court rulings, the Scylla and Charybdis between which any proposed fare must chart a course in order to gain approval. Non-discrimination is, of course, the test that the court and the Examiner claim Youth Fare does not pass. But the question of "reasonableness" is also worth looking at, if only to dispel the misconceptions of those who resented Youth Fare...
...unreasonable fare," by traditional CAB idiom, is not one that is too high: it is a fare that clearly does not allow the airline to cover the cost of transporting the ticket-holder. For competitive reasons, an airline might conceivably want to introduce such a fare; even though it lost money, it would lure customers away from the competitor and thereby increase "brand identification." The "reasonableness test" attempts to preclude such cut-throat tactics. To the CAB and the airlines, a fare is "reasonable" if it passes the "profit-impact" test: the revenues generated by the fare must excede...
Although the airlines presented only fragmentary estimates based on remarkably unsophisticated tests (inflight questionnaires asking if Youth Fare had induced the student to fly), the Examiner could find no evidence to suggest that Youth Fare was in fact unreasonable. Youth Fare was paying its own way and making a profit besides: full-fare passengers were not subsidizing students, as many of them believed. The fact that Youth Fare was profitable had another implication: the airlines would try to block acceptance of the Examiner's report designed to eliminate the service...
...airlines therefore want to keep the basic fare for businessmen at a profitable level. At the same time, of course, they want to encourage more people to fly. Lower fares can greatly increase the numbers of non-businessmen using the airlines--grandmothers, students, housewives and virtually every middle-class group in society has a very elastic demand for air travel. In Ec 1 terms, the airlines know that through fare discrimination--one fare for the elastic sector and one for the inelastic business sector--they can greatly increase both their profits and the number of people...