Airline Competition:

Higher Fares and Less Competition Continue at Concentrated Airports

RCED-93-171: Published: Jul 15, 1993. Publicly Released: Aug 4, 1993.

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Pursuant to a congressional request, GAO reviewed the effects of market dominance on fares and service at major U.S. airports, focusing on: (1) a comparison of fares among airports dominated by one or two airlines and those where there is more competition; (2) other factors that could explain differences in fares; (3) changes in airport concentration; and (4) changes in the level of service at airports dominated by one or two airlines.

GAO found that: (1) fares averaged 22.3 percent higher at concentrated airports as compared to unconcentrated airports; (2) factors other than market dominance contributed little to the differences in fares between concentrated and unconcentrated airports; (3) dominant airlines increased their fares at concentrated airports as their market share at the airports increased; and (4) airlines offered more direct service from concentrated airports, but competition on routes continued to decline.

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