Pursuant to a congressional request, GAO provided information on airline operating and marketing practices that restrict the entry of new airlines in the deregulated airline industry, focusing on: (1) whether barriers still exist that prevent airlines, particularly those started after deregulation, from servicing new markets; and (2) how these barriers have affected fares and service.

GAO found that: (1) barriers to entry persist in the airline industry; (2) federal limits on takeoff and landing slots at certain major airports, long-term exclusive-use gate leases, and perimeter rules prohibiting flights of certain distances at LaGuardia and Washington National Airport continue to impede new airlines' access to airports; (3) while such barriers can potentially affect any airline, they primarily affect airlines started after deregulation because the established airlines hold nearly all of the slots, are usually the beneficiaries of exclusive-use gate leases, and have their hubs located close enough to airports to avoid perimeter rule limitations; (4) these barriers particularly impede the entry of newer airlines in key markets in the East and upper Midwest because several airports in those regions have leased most of their gates to one airline; (5) even where airport access is not a problem, airlines sometimes choose not to enter new markets because certain strategies of established airlines make it extremely difficult for other carriers to attract traffic; (6) taken together, these marketing strategies deter new as well as established airlines from entering those markets where an established airline is dominant; (7) as a result, competition suffers, leading to higher airfares; and (8) the effect of these strategies tends to be the greatest, and fares the highest, in markets where the dominant carrier's position is protected by operating barriers. GAO also found that: (1) measuring the effects of barriers to entry on the quality of service is more difficult; and (2) while barriers may reduce the number of competing service options, consumers receive benefits in other ways, such as free frequent flier trips.