The United States Government Accountability Office (GAO) has disclosed this in its report caption 'Airline Competition - the Average Number of Competitors in Markets Serving the Majority of Passengers Has Changed Little in Recent Years, but Stakeholders Voice Concerns about Competition.' The report, prepared at the US Congress' advice, was released on 11th June 2014.

The report says: "two stakeholders supported either eliminating airline loyalty programs or taxing their benefits as a means to increase competition among airlines. The Internal Revenue Service announced in 2002 that it does not plan to pursue a tax enforcement program regarding promotional benefits such as frequent flyer miles. As a result, employees are currently able to keep mileage earned from flights that are paid for by their employer without being taxed for the value.89 Taxing benefits from airline reward programs, according to these stakeholders, would enhance competition by enabling airlines to compete route-to-route without regard to the extra benefit of frequent flyer miles."

According to the report, another key challenge in improving competition cited by two consumer advocacy organizations, three travel industry organizations and another stakeholder is the incomplete information provided to ticket buyers about the total cost of air travel that includes taxes, ancillary fees, and surcharges.

These stakeholders emphasized that competition between airlines is undermined when consumers have limited ability to shop comparatively and make decisions about their air travel purchases without full fare and fee information.

The report notes that in May 2014, Department of Transport (DOT) issued a notice of proposed rulemaking to, among other things, make airline pricing of ancillary fees more transparent. Another rulemaking would require more detailed reporting of ancillary fees to DOT. The airline industry has generally opposed this effort, arguing that expanded reporting is too complex to be economically justified and could be used to impose new taxes.

Several consumer advocacy and travel industry organizations recommended that the federal government place more scrutiny on international alliances by conducting regular reviews to evaluate the effects of antitrust immunity. Two stakeholders supported a federal role in helping U.S. airlines compete in the global market as they assert government support and minimal regulatory burdens in some foreign countries give airlines like Etihad Airways, Emirates, and Qatar Airways from Persian Gulf states a competitive advantage over U.S. airlines.

Since 2007, there have been four major airline mergers. As a result of this consolidation, about 85 percent of passengers in the U.S. flew on four domestic airlines in 2013. Certain industry observers have raised concerns that consolidation could have adverse effects on airline competition, such as higher airfares and reduced service. Others argue that consumers stand to benefit from recent changes in the industry as profitable airlines reinvest in new planes and expand their networks.

In recent years, consumers have experienced higher airfares, additional fees, and fewer flights in certain markets, but also new services and expanded networks. Consumers paid about 4 percent more in real terms, on average, for air travel in 2012 than in 2007, without considering additional fees. The airline industry has reduced flights, especially to smaller airports, and consolidated service at large airports. Airlines have also invested in new aircraft and introduced new services, such as early boarding and entertainment options, in an attempt to differentiate products and increase revenue.