Why do airlines join IATA? What is the reason for any cartel? It exists to keep prices, and airlines profits, artificially high.
International airfares are set by international agreement and regulated by the airline cartel, IATA. Most international airlines are closely related to, if not directly owned by, their national governments. Most governments in turn have an interest in protecting the profits of their national airline, and the IATA fares are therefore set artificially high. As a condition of membership in IATA, airlines agree (voluntarily, remember) to sell tickets only at IATA-approved prices. IATA rules officially prohibit discounting, and in some countries these rules are actually enforced — one reason some countries have no local ticket discounters (although tickets originating in those countries can often be bought in other countries, if you know where to look). Airlines like the cartel because it raises the prices paid by price-insensitive business travelers. But it’s not the whole story.
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- Why do airlines join IATA? What is the reason for any cartel? It exists to keep prices, and airlines profits, artificially high.
