The quantity of service, as measured by the number of both departures and available seats, had increased for all airport groups. The quality of service, as measured by factors such as the number of destinations served nonstop and the type of aircraft used, showed mixed results, especially for airports serving small and medium-sized communities. Average airfares (expressed in constant dollars and in cents per mile) fell about 21 percent in constant dollars from 1990 through the second quarter of 1998. On average, airports serving medium-large communities had the greatest decrease in fares, and airports serving small communities, the smallest decline. For example, for passengers flying to or from airports in communities of similar size on trips of similar distances in 1998, one passenger traveling from one airport may have paid almost 3 times as much as a passenger traveling from a different airport. At some airports, the decrease was especially large. At many airports, the decline coincided with the introduction of competing service, often from a low-fare carrier, which, in most cases, was Southwest Airlines. At 3 of the 171 airports we examined, average airfares have increased since 1990. Whether the overall average airfare for the airport may have increased or decreased over time depends on the number of passengers flown on all of those routes and the fares they paid. Similarly, we were not able to examine differences in the extent to which certain destinations (such as Las Vegas or Orlando) tend to be more heavily dominated by leisure travel than by business travel. Although average airfares decreased for most communities throughout the period, since 1994 average airfares increased for certain segments of the traveling public—mostly for passengers making short trips to or from medium-large and large communities. Large and Medium-Large Communities Have More and Better Air Service, but the Trends for Small and Medium-Sized Communities Are Mixed

Our review of air service quality factors for scheduled airline departures from May 1978 though May 1998 indicates that the overall quality at most communities served by the airports we reviewed has improved since deregulation. However, the extent to which the overall quality of air service has improved for the 171 airports that we reviewed varies by the size of the community served. In the past, we reported that competition is constrained at these airports because of long-term gate leases or limits on the number of available takeoff and landing slots. Airport officials and one airline told us that other marketing factors—not gate-leasing arrangements—acted as barriers to entry. In other words, passengers pay a premium to fly to and from these airports. Similarly, the overall quality of air service has improved except for that in some small and medium-sized communities. To analyze changes in the quality of air service for these same 171 airports, we obtained data on scheduled airline service from DOT’s Bureau of Transportation Statistics. Cents per passenger mile (constant dollars)

Number of Scheduled Departures and Available Seats at Airports Serving Small, Medium-Sized, Medium-Large, and Large Communities, May 1978 Through May 1998

Total seats, May 1998 (continued)
Total seats, May 1998 (continued)
Total seats, May 1998 (continued)
Total seats, May 1998 (continued)
Total seats, May 1998 (continued)

Number of Destinations for Nonstop and One-Stop Flights at Airports Serving Small, Medium-Sized, Medium-Large, and Large Communities, May 1978 Through May 1998

Number of Scheduled Jet and Nonjet Departures at Airports Serving Small, Medium-Sized, Medium-Large, and Large Communities, May 1978 Through May 1998

Nonjet departures, May 1998 (continued)
Nonjet departures, May 1998 (continued)
Nonjet departures, May 1998 (continued)
Nonjet departures, May 1998 (continued)

Major Contributors to This Report

	Resources, Community, and Economic Development Division, Washington, D.C.

	Office of the General Counsel

Related GAO Products

Aviation Competition: Effects on Consumers From Domestic Airline Alliances Vary (GAO/RCED-99-37, Jan. 15, 1999). Airline Competition: Higher Fares and Reduced Competition at Concentrated Airports (GAO/RCED-90-102, July 11, 1990). U.S. General Accounting Office P.O.
Why GAO Did This Study

Pursuant to a congressional request, GAO reviewed and updated its previous work on airfares and service and reexamined the effect that certain barriers have had on these measures, focusing on: (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 certain 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 that flights from some airports can be--influence competition at affected airports.

What GAO Found

GAO noted that: (1) overall, average airfares declined about 21 percent in constant dollars from 1990 to the second quarter of 1998; (2) not all airports realized a similar decreases in airfares; (3) airports serving medium-large communities had the greatest average decrease in fares, and airports serving small communities had the least average decline; (4) average airfares declined at 168 of the 171 airports GAO examined, often with the introduction of competing service from a low-fare carrier; (5) on the other hand, since 1994, average airfares increased for passengers traveling from 39 airports and generally for passengers making short trips to or from airports serving medium-large and large communities; (6) for passengers flying to or from airports in communities of similar size on trips of similar distances in 1998, one passenger travelling from one airport may have paid almost 3 times as much as a passenger travelling from a different airport; (7) while GAO identified such differences in fares, it should be noted that in developing this report, GAO was unable to account for all factors that may have contributed to them, such as the presence of low-cost competition on particular routes or the extent to which travel on routes tended to reflect generally lower-fare leisure travel or more costly business traffic; (8) the overall quality of air service has improved for airports serving large and medium-large communities, but indicators are mixed for airports in small and medium-sized communities; (9) the quantity of the air service available, as measured by the number of departures and available seats has increased for most of the 171 airports GAO reviewed; (10) airports in large and medium-large communities have experienced a substantial increase in the amount of air service; (11) however, some airports have less air service today than they did in 1978, when the industry was deregulated; (12) other indicators of the quality of air service, including those that measure the number of destinations served by nonstop flights and the type of aircraft used, generally show that quality has improved substantially for airports serving large and medium-large communities; (13) for airports serving small and medium-sized communities the results are mixed; (14) at the 10 airports that, in 1996, GAO reported had restrained competition either because of restrictive gate-leasing arrangements or limits on the number of available takeoff and landing times, competition has changed little; and (15) airfares at these 10 airports continue to be consistently higher than airports of comparable size without constraints.