This trend is expected to continue. Services across the Atlantic and to the Pacific Rim are particularly important to U.S. airlines. That carrier therefore has a competitive advantage. Limited Access to Slots Reduces Commercial Value of U.S. Airlines’ Traffic Rights

U.S. airlines have only limited access to several congested airports in Europe and the Pacific Rim because they cannot obtain slots—reservations for aircraft landings and take-offs—that allow efficient connections with domestic flights. Airlines operating at airports overseas generally have little control over terminal facilities. Cargo Restrictions and Processing Delays Raise U.S. Airlines’ Operating Costs

At three Pacific Rim airports we visited, U.S. airlines face restrictions on distributing cargo in the importing countries and problems clearing customs. In contrast, foreign airlines generally do not experience such problems to the same extent when operating in the United States and thus avoid the resulting drain on efficiency, quality, and competitiveness. DOT and the State Department Have Had Mixed Success in Resolving U.S. Airlines’ Problems in Doing Business Overseas

DOT and the State Department recognize that U.S. airlines face a variety of doing-business problems overseas. However, because it does not periodically collect and analyze information on these problems, DOT cannot determine whether certain problems are pervasive in different countries, document whether they are increasing in number, make the most effective use of its limited resources to address these problems, or enter bilateral negotiations as well prepared as it could be. These include (1) negotiating with foreign governments that are often protecting their own flag carriers from increasing U.S. competition, (2) weighing the elimination of these problems with attempts to obtain valuable traffic rights for U.S. carriers, (3) balancing the competing commercial interests of various U.S. airlines, and (4) addressing these problems with significantly fewer resources in DOT’s Office of International Aviation. Most successes have involved eliminating problems that violate bilateral accords.
Why GAO Did This Study

Pursuant to a congressional request, GAO provided information on the Department of State's and Department of Transportation's (DOT) efforts to resolve the problems U.S. airlines face when operating in Europe and the Pacific Rim.

What GAO Found

GAO found that: (1) U.S. airlines serving key Pacific Rim airports often face obstacles that foreign airlines operating in the United States do not, including limited access to landing and take-off slots, inadequate terminal facilities, restrictions on the performance of ground services, and delays in processing cargo; (2) although obstacles at overseas airports affect all airlines, they most adversely affect U.S. airlines because they are unable to use their superior operational efficiency as a competitive advantage; (3) these obstacles raise U.S. airlines' operating costs and provide the home-country carrier with a competitive advantage; (4) although the State Department and DOT have had some success in eliminating problems that violate bilateral accords, they have been less successful in improving U.S. airline competition in Pacific Rim countries; (5) the State Department and DOT negotiate with foreign governments for the right to perform certain services and attempt to balance U.S. airlines' competing commercial interests with the overall goal of gaining traffic rights for U.S. carriers; and (6) DOT does not collect sufficient information on U.S. airlines' obstacles at overseas airports to determine whether the problems of doing business in the Pacific Rim are pervasive or whether it is effectively using its limited resources to solve these problems.