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On December 22, 1995, a new system of flexible airline fares was introduced,
in which air carriers may set fares at their discretion within a certain range
with the standard cost as the maximum cut depending on their competition with
other carriers and characteristics of season, time, route, etc .
Consequently, there has been rivalry since February 1996 among the three
carriers of ANA, JAL and JAS regarding the establishment of fares. As indicated
by competition to 'lower fares among carriers even after the implementation
of flexible fares in June 1996, this new flexible fare system has promoted competition
among air carriers. In addition, a reporting system has been adopted since December
1994 for reductions of up to 50% in airline fares based on the business policies
of carriers. In accordance with the introduction of the flexible airline fare
system, various discounted fares, such as advance purchase discount and specific
flight discounts with greater discount rates, have been introduced.
In addition to these flexible fares, the advancement of environment for
competition which has been pursued by the Government including the mitigation
of the standard of double or triple tracking (to limit the number of domestic
air carriers to two or three) implemented in April 1996 is expected to expedite
each carrier's efforts to further rationalize management and meet various needs
by users.(Picture)
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