Airline Competition

Although airline industry deregulation has benefited U.S. consumers and made U.S. airlines more efficient competitors, some airlines face serious financial problems and the long-term competitive health of the industry could be at risk. GAO urges the development of a strategy that includes four key elements: (1) improving U.S. airlines' access to capital markets through relaxing the restrictions on foreign investment and control, under certain conditions; (2) enhancing access to the growing international market for all U.S. airlines; (3) reducing barriers to competition; and (4) examining the claims and the counterclaims about airline pricing practices, especially those of bankrupt airlines. Also, a more strategic approach by the Federal Aviation Administration in addressing air traffic control modernization, airport improvements, and workforce issues could improve the efficiency of airline operations.