Reagan National Airport

Congress deregulated the airline industry more than 20 years ago. Since then, fares have declined and service has improved; however, deregulation's benefits have not been evenly distributed throughout the United States. In addition, the federal high-density rule and the perimeter rule have created barriers to entry for new airlines wishing to begin service and for established airlines seeking to serve new markets and can influence competition. Reagan National Airport is subject to both rules. To take off or land during any given hour at Reagan National, an airline must first obtain a slot to do so. In addition, no airline may operate a nonstop flight that exceeds 1,250 miles to or from the airport. This report examines the impact of adding flights and extending the perimeter at Reagan National on the operations at Dulles International and Baltimore/Washington/International airports. GAO found that adding nonstop flights from Reagan National to destinations beyond the existing 1,250-mile perimeter would likely cause only a limited number of passengers to switch from either of the other two airports.

GAO noted that: (1) to improve the access that various communities have to Washington, D.C., and to increase competition in some of those markets, three major legislative proposals introduced during 1999 would provide exemptions to the number of commercial jet flights allowed at Reagan National by: (a) adding between 6 to 36 jet flights per day; (b) permitting flights to destinations beyond the existing 1,250-mile perimeter; and (c) reviewing whether additional flights affect noise, safety, and the environment around Reagan National; (2) according to an analysis by the Department of Transportation (DOT), Reagan National could accommodate up to seven additional flights per hour without compromising safety; (3) airport officials acknowledge that Reagan National could handle additional hourly flights without incurring significant delays, but they believe the number of flights to be less than seven per hour; (4) DOT and airport officials agree that Reagan National could accommodate 36 new jet flights per day, as proposed in one bill; (5) DOT has some flexibility to allow airlines to operate flights in slots that are available but unused by effectively moving the slots to the times that are more compatible with commercial interests and consumer demand; (6) according to GAO's analysis of the impact of four new airlines on competition among the area's airports, adding nonstop flights from Reagan National to destinations beyond the existing 1,250-mile perimeter would likely cause only a limited number of passengers to switch from BWI or Dulles to Reagan National; (7) GAO's analysis indicated that many travellers using BWI or Dulles for travel beyond the perimeter are likely to continue to prefer them because of the price or convenience and would not switch to Reagan National; (8) other business travellers are likely to switch if longer-distance nonstop flights become available at Reagan National because that is their preferred airport; (9) the fares at Reagan National for nonstop flights beyond the perimeter may be higher than for similar flights at the other airports because low-fare airlines may have difficulty gaining access to Reagan National's facilities; and (10) even if all of the 12 to 24 nonstop flights per day to and from destinations beyond the perimeter suggested by the proposed legislation moved from BWI or Dulles to Reagan National, they would represent between 1 and 2 percent of the total flights at those airports.