Airline Competition:

Fares and Concentration at Small-City Airports

RCED-91-51: Published: Jan 18, 1991. Publicly Released: Feb 11, 1991.

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Pursuant to a congressional request, GAO examined fares and competition at 39 airports serving small cities to determine whether: (1) fares from small-city airports were higher than fares from major airports; (2) market concentration at small-city airports was associated with higher fares; and (3) market concentration at major destination airports affected fares on routes from small-city airports.

GAO found that: (1) there was little disparity between fares at small-city and major airports; (2) fares from small-city airports were only 3 percent higher than fares from major airports; (3) airline concentration at small-city airports was only slightly associated with higher fares; (4) fares at concentrated small-city airports were only 6 percent higher than fares at unconcentrated small-city airports; (5) concentration at major destination airports had a strong influence on fares at small-city origin airports; (6) fares from small-city airports to major airports were 34 percent higher if the major airport was concentrated than if it was unconcentrated; (7) when both the small-city origin and the major destination airports were concentrated, fares were 42 percent higher than when the airports at both ends of the route were unconcentrated; and (8) concentration at major airports could mean higher fares for passengers flying to and from those airports.

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