Airline Competition:

Industry Operating and Marketing Practices Limit Market Entry

RCED-90-147: Published: Aug 29, 1990. Publicly Released: Sep 11, 1990.

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Pursuant to a congressional request, GAO reviewed: (1) how various airline industry operating and marketing practices limited entry into the deregulated airline industry; and (2) how airline industry operations have affected competition.

GAO found that: (1) several physical entry barriers have tightened access to airports since deregulation; (2) between December 1985 and December 1988, eight major airlines increased their control of operating authority slots from 70 percent to 96 percent; (3) most of the gates at the nation's largest airports are under long-term exclusive-use leases to major airlines; (4) 22 of the 183 airports it studied had a noise control program that could potentially limit competition; and (5) 81 percent of travel agents said that business customers chose flights to accumulate additional frequent flyer miles more than half of the time.

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