Report Urges Changes to Improve Competition

A government plan to crack down on predatory practices in the airline industry is flawed and the Transportation Department should take other steps to boost competition, according to a report to Congress. The study by the National Research Council, commissioned by the department, stems from allegations that major airlines were using unfair practices to squash discount rivals and from the government’s desire to use competition to increase flights to smaller communities and reduce air fares. But the study said proposed guidelines to curb alleged unfair practices could “stifle competition more than encourage it.” Instead, the council said competition could be improved by dropping some flight restrictions at popular airports, by charging “congestion fees” at busy airports and by ending a prohibition against foreign investment in U.S. airlines, which “could result in more seed money for start-up carriers.” The Transportation Department had no immediate response to the report.