Airline Deregulation:

Changes in Airfares, Service, and Safety at Small, Medium-Sized, and Large Communities

RCED-96-79: Published: Apr 19, 1996. Publicly Released: Apr 25, 1996.

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Pursuant to a congressional request, GAO examined the deregulation of the airline industry, focusing on: (1) airfares and the quantity, quality, and safety of air service since deregulation.

GAO noted that: (1) the average fare per passenger mile is 9 percent lower at small-community airports, 11 percent lower at medium-sized airports, and 8 percent lower at large-community airports; (2) the largest increase in fares occurred in the Southeast and Appalachian regions, and the largest decrease occurred in the West and Southwestern regions; (3) this geographic disparity exists because of the intense competition between low-cost, new carriers in the west and dominant, high-maintenance carriers in the Southeast; (4) the overall quantity of air service at airports has increased, but large communities have experienced the largest increase; (5) air service quality is difficult to measure and depends on the number of destinations served by nonstop flights and one-stop connections, and the type of aircraft used; (6) air service quality since deregulation has been mixed largely due to the airlines hub networks and greater use of turboprop aircraft; and (7) the overall accident rate since deregulation has dropped, but there are no statistically significant differences in air safety trends for any of the airport groups.

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