Leading Article: Flying in the face of the free market

THERE ARE, sadly, many candidates for the title of "most fixed market in Britain". Agriculture springs to mind, as does the new car trade. But, in terms of its stubbornness and blatancy, air travel has always been a prime contender for the award. Fresh revelations about the behaviour of our leading airline may just have clinched it. The wonder is that the relevant competition authorities seem so unable - or unwilling - to do much about it.

The "back-door" fare increases now being planned show that the airlines are still unashamed about fixing artificially high fares. British Airways has always been an aggressive player. But this move is startling in its audacity, even for this company.

To take one small example, if you want to fly from Heathrow to Jersey, say, you have no choice but to use BA, and from April you will have to pay an extra pounds 7.70 for the trip, supposedly to cover extra tax. But the problems do not end there. Heathrow airport is the most sought after in the world. Every airline on the planet is desperate for "slots" to land here. But the Bermuda Agreements that have governed Anglo-American air travel since the Forties limit the airlines that can fly transatlantic from Heathrow to just two on each side: BA and Virgin from the UK, American and United from the US. Cities such as Las Vegas are crying out for direct links from London, and many airlines are keen to serve it, but the bilateral agreement does not allow new entrants. Any new slots that do become available are usually carved up. This stymies competition and innovation.

By most standards, we enjoy a relatively deregulated market. But the big players have too much power. Passengers get a raw deal. If the Government and the European Commission fail to act, we'll know who really rules the skies.