Aviation competition : challenges in enhancing competition in dominated markets

811696PDFResearch PaperGAO/01-518TAirlinesAviationRegulationsPolicyDeregulationMergersCompetitionMarketsUnited StatesUnited States. General Accounting OfficeHecker, JayEtta Z.United States. Federal Aviation AdministrationNTL-AVIATION-Aviation Planning and PolicyUS Transportation CollectionThe potential shifts in aviation industry structure that would result from proposed mergers represent a crossroads for the structure of the airline industry and the state of competition and industry performance. These proposals have raised public policy questions about how such consolidation within the airline industry could affect competition in general and consumers and small communities in particular. The Congress has long been concerned about ensuring that the airline industry remains vibrant and competitive. The bill now before the committee-The Aviation Competition Restoration Act (S. 415)-expresses that concern by focusing on airline market concentration. The bill would require the Department of Transportation (DOT) to assert its authority in analyzing and overseeing competition in the airline industry. It would generally prohibit airlines from merging or acquiring the assets of another airline if the resulting carrier met certain tests of market strength and the Secretary of Transportation determined that the acquisition would substantially lessen competition or result in unreasonable industry concentration or excessive market domination, unless the merging airlines were willing to surrender gates, facilities, and other airport access to smaller carriers. The bill would also require the Secretary to investigate the assignment and usage of gates, facilities, and other assets by airlines that have dominant market positions at large airports. The bill would then have the Secretary require those airlines to surrender gates and other airport assets upon request of another airline or the Secretary's own motion if gates and other assets are not available and competition would be enhanced