Industry Insights

New GAO Report Details Increased Airline Competition

June 30, 2026

Recently, the U.S. Government Accountability Office (GAO) released a report detailing how consumers have benefitted from increased competition in the airline industry. Domestic fares have dropped and competitors per city pairs have increased, all while the industry has faced significant headwinds.

Key quotes and takeaways from the report, “Airline Competition: Indicators Suggest Increased Competition in the Past Two Decades, but Lower-Cost Airlines Face Challenges” are below:  

• “Our analyses of airline competition metrics—which provide a broader look at airline competition over a longer time frame—found that, compared to 2007, competition in the past two decades had increased. This finding was generally consistent across key metrics we assessed—fares; total number of seats offered by airlines; and market structure indicators (i.e., market share, number of effective competitors, and market concentration)—though the market structure indicators plateaued from 2022 through 2024.”

• “Through our data analysis, we found that average inflation-adjusted estimated domestic fares (average fares) were lower in 2024 as compared with 2007, an average of 15 percent across all quintiles…The average fares on the less-traveled routes—generally routes to small and rural communities—experienced the largest decrease in fares of about 18 percent (an average of about $44 per ticket) in 2024 as compared with 2007.”

• Airlines compete for those passengers through fares as well as non-price strategies, such as reliability, loyalty programs, and other service offerings, like airport lounges.

• The current U.S. airline industry reflects a significant transformation in response to numerous challenges and shocks experienced over several decades.

• Following the COVID-19 pandemic…domestic airlines have faced increased labor and other costs. Lower-cost airlines, which rely on lower operating costs to charge lower fares, have been particularly hard hit.

• The airline industry also is facing significant cost and operational challenges. For example, according to Bureau of Labor Statistics data, the real annual median wage for airline pilots, copilots, and flight engineers was 31 percent higher in 2023, compared to 2017. Our 2024 and 2025 reports discussed other challenges affecting the U.S. airline industry, including air traffic controller shortages, airspace congestion, and difficulty obtaining new aircraft and parts. We reported that these challenges could lead to delayed or cancelled flights or airlines reducing their numbers of scheduled flights.
  

The full report is available here.