Travel: What goes up must come down in price: There's a fare war above the Atlantic. Simon Calder shows us to the cheap seats

The last big air fares war across the Atlantic involved some hauntingly familiar names. In 1981, Laker Airways and Pan Am slashed their prices to compete against each other, and against British Airways and TWA. Fares were set at seemingly ridiculous levels, such as pounds 154 return from London to New York.

Thirteen years on, the players are different: American Airlines and United have replaced Pan Am (now defunct) and TWA (whose only remaining transatlantic flight from London is to St Louis), while Sir Freddie Laker's mantle has passed to another British entrepreneur with an eye for publicity, Richard Branson. The fares, though, are almost identical.

This autumn, as BA's World Offers advertising campaign says, you can fly the Atlantic and back for pounds 168 (plus all manner of taxes). Transatlantic fares always fall in the fall, but this year the opening salvoes have arrived earlier and more intensely. Airlines are chasing after each other and after the discretionary traveller - people who would not fly but for the fact that prices are absurdly low.

AGENTS VERSUS AIRLINES

For years, the only way to get low fares across the Atlantic has been to go to a discount flight agency such as the ones that advertise in these pages. Normally, airlines keen to fill spare capacity do not undercut their own published prices. Instead, they sell off tickets at the keenest prices to 'consolidators'. These ticket wholesalers sell seats either direct to the public or through the discount agencies. Now BA is advertising its best fares (for instance, pounds 199 from London to Los Angeles) for sale direct. You can buy these through an agent, but since one phone call to the airline will secure the same deal, BA is bound to draw trade away from agents to its own sales staff.

Some agencies are finding this new state of affairs hard to come to terms with. One agency assured me, for example, that for a weekend in New York in November (venue for the real airline attrition), the best fare is pounds 282 on United - pounds 49 more than the lowest BA fare.

AIR CONDITIONS

We, at the back of the plane, are not really the world's favourite passengers. Airlines make their profits (or, more usually, stem their losses) from 'premium' passengers who need flexibility. So the bargains are bound up in a tangle of conditions. The most significant are that you must stay a Saturday night in the US, and that changes in reservations are either impossible or expensive. Both measures are intended to prevent business travellers taking advantage of cheap fares. One airline allows more freedom: Air India, flying daily between London and New York, permits you to change dates at will, and even to fly out and back on the same day. Welcome Travel (071-439 0899) sells these tickets for pounds 240 for travel on or after 12 September.

TAXES AND OTHER VARIABLES

The only certainties in aviation life across the Atlantic are taxes and confusion. The US authorities apply a baffling range of fees, from federal Customs and Immigration taxes to the Passenger Service Charges levied by individual airports - not forgetting a couple of bucks for Aphis, the Animal, Plant and Health Inspection Service. These total around pounds 15. From 1 November the Government's Air Passenger Duty will add another pounds 10 to the cost of transatlantic flights from the UK.

Airlines maintain they have every right to show these charges separately, since they are merely acting as tax collectors on behalf of government. Only Virgin Atlantic adds a pounds 10 security charge, which can make its 'headline' fares appear more attractive than they really are.

Weekend supplements can add substantially to the quoted fare, too. Typically you pay an extra pounds 15 each way for travel on a Friday, Saturday or Sunday - simply because this is when demand is heaviest. The headline figure of pounds 167 on Virgin Atlantic between London and New York climbs to pounds 232 when all the possible extras are added: an increase of 39 per cent.

For families, the cost of a transatlantic trip can mount alarmingly. According to airlines, children become grown-ups at the age of 12. Virgin Atlantic, however, has extended the age limit to 16 on its flights to Florida. In order to stimulate family traffic to an area which has received plenty of adverse publicity, Richard Branson is charging even burly 15-year-olds only half the normal price.

Real bargain hunters, anxious to trim a few more pounds from fares which are already extremely good value, have few tricks left. But BA shareholders who have yet to use their annual 10 per cent discount voucher can get it to cut fares even further. Anyone else can just watch the in- flight movies (for which a charge of pounds 2 each way used to be made) and consume pounds 10 of drink (you used to have to pay), in order to get fare levels back to where they were in the autumn of 1981.

THE WAY TO GO

We selected four segments of the transatlantic market, and asked three discount agencies to find the best fares for specific journeys. The agencies were Airline Ticket Network (ATN: 0800 727747), Bridge the World (BTW: 071-911 0900) and Quest Worldwide (QWW: 081-547 3322). Similar fares may be available from other agencies, or from the airlines direct. Fares quoted include all applicable taxes and supplements.

London to New York: Air traffic between the two largest cities is wearing a furrow in the sky. At least 20 wide-bodied jets a day (plus a couple of Concordes) fly the 3,500 miles from London to New York. After a summer in which capacity on the route could not be filled, the airlines are approaching the low season by laying on even more capacity. Sample trip: 25-27 November for a Christmas shopping weekend. Best deal: pounds 223, direct from BA (0345 222111).

UK to New York: Surprisingly, the growth in flights from London to New York has been accompanied by a contraction in direct services from provincial airports. This has opened the way for 'third country' carriers to step in. Aer Lingus has cornered the New York market from eight regional airports in the UK, with a transfer at Dublin to the transatlantic flights. Icelandair, veteran purveyors of cheap transatlantic flights, drops you off at a more unlikely spot on its Glasgow- New York service: Keflavik ( pounds 204 including tax, through ATN). The remaining direct, non-stop services are likely to maintain fares at high levels. Sample trip: Glasgow-New York, 30 October for a week. Best deal: non-stop on BA, pounds 295 through ATN; one-stop via Dublin on Aer Lingus, pounds 236 through QWW.

London to West Coast: In terms of miles-per-pound, the West Coast is better value even than the New York route. For San Francisco, the combined capacity offered by BA, Virgin and United appears excessive; and to Los Angeles, Air New Zealand joins the scrum. Add in all the carriers who offer tempting fares to persuade you to travel indirectly, and it becomes the ultimate buyer's market. As competition hots up, 3p a mile is the sort of figure you should be looking at for the round-trip to California. Sample trip: 15 September for a fortnight to Los Angeles. Best deal: pounds 365, non-stop on Air New Zealand (QWW); one- stop via St Louis on TWA, pounds 361 (BTW).

UK to US: It is not (yet) possible to fly from Birmingham, West Midlands, to Birmingham, Alabama, so passengers from regional points in the UK to smaller cities in the US have to change somewhere en route. Every carrier, from Air France to Air Canada, is after 'sixth-freedom' traffic, meaning they fly you to their home country and then on to various points in the US. The most aggressive partnership is KLM and Northwest. KLM has flights from all over the UK to Amsterdam, where you can transfer to a range of destinations on the Northwest network. Our sample trip is from Manchester to Miami, but anyone heading for Florida could also consider charter flights direct from the city to Orlando: not only are they good value, they do not involve a change of plane. Sample trip: Manchester-Miami, 1 October for two weeks. Best deal: pounds 372 Air Canada via Toronto (ATN).

BOOK NOW OR LATER?

If you want to go on a specific flight, book now: if you love a bargain, wait a couple of weeks. So far, the fares fight is confined to BA and Virgin; American Airlines and United have yet to respond to the price cuts. 'Mid-September is when the fun really starts,' says Trevor Worth, transatlantic flights specialist for Quest Worldwide.

(Photograph omitted)