Airline Competition:

DOT and Justice Oversight of Eastern Air Lines' Bankruptcy

RCED-90-79: Published: Feb 23, 1990. Publicly Released: Mar 13, 1990.

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GAO reviewed Department of Transportation (DOT) and Department of Justice participation in an airline's bankruptcy proceedings.

GAO found that: (1) DOT and Justice were responsible for protecting and promoting airline competition during the bankruptcy proceeding; (2) DOT pursued administrative remedies against mergers and asset sales that inhibited competition; (3) DOT temporarily reallocated the airline's take-off and landing slots at two airports to promote competition; and (4) both agencies opposed asset sales that have reduced regional competition. GAO also found that: (1) neither DOT nor Justice was able to assess the airline's reorganization plan to determine its impact on airline competition; and (2) Justice addressed potential antitrust issues involved in proposed asset sales to determine whether such sales had an anticompetitive effect on the airline industry.

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