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CED-81-103 1 (1981-06-01)

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REPORT BY THE U.S.                          RELEASED



General Accounting Office


The Changing Airline Industry:

A Status Report Through 1980


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The airline passenger industry is changing, re-
sponding to greater freedoms provided by the
Airline Deregulation Act of 1978. GAO's re-
view of airline operations, since deregulation
began through calendar year 1980, shows

   --increased traffic, but with significant
   1978 and 1979 gains reduced by 1980
   declines;

   --lower rate of increase in fares than in
   airline costs;

   --higher 1978 and 1979 industry rates of
   return on investment followed by a sharp
   decline in 1980;

   --significant 1978 and 1979 productivity
   gains, severely eroded in 1980 by declin-
   ing load factors;

   --more weekly departures for all sizes of
   communities but fewer available seats
   for most communities; and

   --no apparent adverse effect on safety.


CED-81-103
JUNE 1, 1981


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