Summary: GAO reported last year that airline deregulation had led to lower airfares and better service for most air travelers, mainly because of greater competition spurred by the entry of new airlines and the expansion of established carriers into new markets. (See GAO/RCED-96-79, Apr. 1996.) However, some airports--particularly those in the East and upper Midwest--have experienced higher fares and worse service since deregulation. Certain industry practices, such as restrictive gate-leasing arrangements at key hub airports, have contributed to these problems. (See GAO/RCED-97-4, Oct. 1996.) This testimony draws on these two reports and discusses (1) why some airports serving small- and medium-sized communities in the East and upper Midwest have not seen the same level of entry as those serving communities that have benefited from deregulation and (2) GAO's recommendations and other initiatives that may boost competition, reduce fares, and improve the quality of service at those small- and medium-sized community airports.
