The General Accounting Office (GAO) was requested to assess changes to air transport regulation that have been undertaken by the European Economic Community (EC) and the effects of those changes on U.S. and European airlines. Briefly, GAO found the following: Since 1987, the EC has been phasing in measures that reduce the ability of inidividual countries to control airlines' pricing and access to markets and the amount and frequency of service offered on routes within the EC. Measures adopted in 1987 and 1990 did not lead to an increase in competition from new airlines entering the market or to lower airfares, and because the third set of measures was not implemented until January 1993, it is too soon to assess their effect. Instead, mergers and acquisitions may be leading to less competition in the EC aviation market. These activities may result in the EC market being dominated by as few as three major airlines that will be in a stronger position to challenge U.S. airlines. The EC's measures have focused on EC airlines operating within the EC and have had little direct effect on U.S. airlines. However, U.S. airlines' ability to compete in the EC could be limited by some measures, such as a prohibition against non-EC airlines' introducing low-fare initiatives on routes between EC countries. In addition, some EC governments are trying to restrict U.S. airlines' services to their countries as they renegotiate their bilateral air service agreements with the U.S. To improve aviation relations with the EC countries, the U.S. Department of Transportation has undertaken several initiatives, such as offering these countries the opportunity to establish agreements that could ease restrictions on their airlines' access to the U.S. However, the EC Commission has proposed limiting the ability of individual governments to establish less restrictive agreements with the U.S. The Commission has also proposed gaining the authority to negotiate multilateral agreements on behalf of all of its members after 1998. But as long as some EC members oppose this proposal, aviation relations between the U.S. and EC countries will continue to be governed by bilateral agreements.

  • Supplemental Notes:
    • Report to Congressional Requesters.
  • Corporate Authors:

    U.S. General Accounting Office

    441 G Street, NW
    Washington, DC  United States  20548
  • Publication Date: 1993-4


  • English

Media Info

  • Features: Appendices; Figures; Tables;
  • Pagination: 72 p.

Subject/Index Terms

Filing Info

  • Accession Number: 00629152
  • Record Type: Publication
  • Report/Paper Numbers: GAO/RCED-93-64
  • Files: TRIS
  • Created Date: May 26 1993 12:00AM