Airline Competition

Pursuant to a congressional request, GAO analyzed fare and service changes at Lambert-St. Louis International Airport after two principal carriers, which individually handled 56 percent and 26 percent of all enplanements, merged.

GAO found that: (1) the remaining airline handled 82 percent of enplanements and increased its direct, nonstop, and jet service to more cities; (2) no other airline handled more than 3 percent of enplanements; (3) the other airlines reduced the number of routes they served from 83 to 66 and provided nonstop and direct services to fewer cities; (4) the remaining airline offered 75 percent of flights on 80 percent of nonstop routes and was the only nonstop carrier on 76 percent of routes; (5) the remaining airline's round-trip fares on 67 major routes increased by 13 to 18 percent, as compared to an average increase of 5 to 6 percent for all airlines; and (6) the remaining airline increased its fares at another airport at the average rate. GAO believes that other airlines which attempt to add flights or gain a larger share of enplanements at St. Louis would face difficulties in: (1) obtaining facilities; (2) overcoming the effects of airline marketing tools such as frequent flyer programs, travel agent commission overrides, and computerized reservation systems; and (3) matching the number of flights the merged airline offered.