DEPARTMENT OF STATE
Washington, D.C. 20520
October 31, 1977
This letter refers to tariff filings recently made by KLM for new Super-Apex fares between the United States and Europe for the 1977-78 winter traffic season.
The United States is committed to an international aviation policy which features low fare, competitive international air services. At the same time, the United States believes that the new Super-Apex fares must be regarded as experimental in nature because their effect on the competitive structure of North Atlantic passenger rates is as yet unclear. However, the possibility exists that these experimental fares, once introduced, could become permanent even though they might later prove to have a disruptive effect on the market. This is due to the fact that the provisions of Article 11 of the US-Netherlands Air Services Agreement of 1957 do not easily permit the suspension of existing fares.
In view of this possibility, the United States proposes that neither government will, with regard to Super-Apex filings for effectiveness during the 1978 summer traffic season, apply the provisions of the US-Netherlands Air Services Agreement to maintain in existence any new Super-Apex fares which may have been approved for the 1977-78 winter season if the other government has disapproved a similar summer fare filing. Moreover, during the 1977-78 winter season either government may take action to prevent the continuation of such fares on or before their respective dates of expiration, provided that it notifies the other government six weeks in advance of its intent to take such action and agrees to consult with the other government if consultations are requested.
It is understood that presently existing fares are not affected hereby.
I would appreciate a reply from you confirming that the foregoing is acceptable to your Government.
(sd.) MICHAEL H. STYLES
Michael H. Styles
Acting Deputy Assistant Secretary
A. R. Tammenoms Bakker
Ambassador of the Netherlands