Summary: More than two decades have passed since Congress deregulated the airline industry. The Airline Deregulation Act of 1978 phased out the federal government's control over fares and service and allowed market forces to determine the price, quantity, and quality of domestic air service. This report determines (1) how airfares have changed since 1990 for travel to and from 171 airports serving various U.S. communities; (2) how the quality of air service has changed since 1978 for travel to and from these airports; and (3) the extent to which barriers to entry-restrictive gate-leasing arrangements, controls on the number of allowable takeoffs and landings at some airports, and the limits on the distance of flights from some airports influence competition at affected airports. GAO found that, overall, average airfares fell about 21 percent in constant dollars from 1990 to the second quarter of 1998. However, not all airports realized similar decreases in airfares. In addition, the overall quality of air service, measured by both quantitative and qualitative factors, has improved for airports serving large and medium-large communities, but indicators are mixed for airports in small and medium-sized communities. GAO found that competition has changed little at the 10 airports it cited in 1996 for restraining competition through restrictive gate-leasing arrangements or limits on the number of available takeoff and landing times.
