Airline Competition:

Pending Legislation Helps to Address Serious Competitive Problems

T-RCED-91-54: Published: May 15, 1991. Publicly Released: May 15, 1991.

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GAO discussed proposed legislation relating to airline competition. GAO noted that: (1) airlines needed comparable access to airport facilities to compete with other carriers; (2) slot restrictions and limited availability of gates limited carriers' access to airports; (3) restrictive marketing practices relating to computerized reservation systems (CRS) and frequent-flyer plans made it difficult for carriers to compete effectively in each other's markets; (4) 76 percent of the nation's passengers flew on routes served by 3 or fewer carriers; (5) exclusive leasing limited non-lessees' access to gates that were sometimes used only part of the day; (6) airlines owning slots could charge 4-percent higher fares, on average, on routes to and from those airports; (7) 2 systems dominated the CRS market, for a combined market share of 71 percent; (8) many travel agents believed that business passengers chose their flights on the basis of frequent-flyer plans more than half the time; and (9) foreign ownership of U.S. carriers was limited to 25 percent of the carrier's voting stock, which limited access of U.S. carriers to capital and reduced their ability to compete.

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