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State of the Airline Industry: Strategies for Addressing Financial and Competition Problems

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Report Type Reports and Testimonies
Report Date March 10, 1993
Report No. T-RCED-93-21
Subject
Summary:

Although deregulation of the domestic airline industry has benefited U.S. consumers through lower fares and more frequent service on many routes, some firms face serious financial problems, and the long-term competitive health of the industry could be at risk. This testimony discusses the interrelated competitive and financial problems of the industry, with a view toward protecting the interests of consumers and ensuring that U.S. airlines are positioned to compete successfully in domestic and international aviation markets. In GAO's view, an effective strategy for reviving the ailing U.S. airline industry should include the following four key elements: improving airlines' access to capital markets by easing restrictions on foreign investments and control; improving access to the growing international market; lowering barriers to competition; and examining airline pricing practices, especially those of bankrupt carriers.

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