Airline Competition

Pursuant to a congressional request, GAO provided information on ways to ensure that regulations covering passenger facility charges (PFC) would further congressional goals of enhancing airport capacity, safety, and security and reducing noise.

GAO found that: (1) PFC would help airports fund projects to expand capacity, reduce noise, and enhance safety, security, and competitive access; (2) the ability to expand capacity would give airports more flexibility both in stimulating competition and in reducing congestion and delay; (3) restrictive clauses in airport-airline agreements impeded airport expansion, but their prevalence suggested that airports would benefit from having an independent source of funding; (4) officials at eight airports reported that majority-in-interest (MII) agreements greatly impeded airport improvement projects, discouraged expansion, and reduced competitive access; (5) PFC gave airports more control over expansion decisions by reducing the airports' need for incumbent airline approval of capital projects; and (6) under the aviation act, MII agreements and other restrictive clauses in existing airport use agreements would not prevent the effective use of PFC funds. GAO believes that: (1) PFC-funded projects need to encompass the wide variety of projects that enhance airport capacity, safety, security, and competition and reduce noise; (2) PFC-funded facilities may be needed to ensure that potential entrant airlines have competitive access to those facilities; and (3) as airports begin to implement the PFC, consumers will need information on where and what PFC are charged.

Recommendations

Our recommendations from this work are listed below with a Contact for more information. Status will change from "In process" to "Open," "Closed - implemented," or "Closed - not implemented" based on our follow up work.

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