Delta Air Lines and American Airlines are breaking their interline agreement. The two carriers could not agree on terms for renewing their partnership and, as such, will cease to offer many of the cross-carrier benefits seen as common amongst legacy carriers. American appears to be blaming Delta’s efforts to negotiate special rates versus the industry standard numbers. And, while the reasoning is part of the story, the bigger factor is the impact it will (or will not) have on passengers.
Interline agreements allow airlines to issue tickets on each others’ flights, collect fares for the other and transfer bags between the carriers, among other things. It is a basic level of cooperation which historically has existed to allow an airline to sell travel through to destinations it might not serve directly or to offer a bit of flexibility for a passenger. It is not hard to understand that either American or Delta could see their respective networks as sufficient to overcome such needs today. Still, there are times where schedule or price or other factors make it ideal to have itineraries booked on multiple carriers. That is going away for this pair. A traveler will no longer be able to book a round-trip ticket which includes American one way and Delta the other.
And, while there is no doubt that planes and passengers will continue to move, most of them blissfully unaware of this policy shift, there remain further questions of just how far this might spread. There are others in the industry without the interline agreements and they still manage to run, but there are challenges with that business model. Especially when it comes to attracting higher yielding business travelers who need reliability and flexibility in their plans. Could Delta continue to flex its muscle, ultimately further isolating itself from other carriers beyond American?
This is, at its core, a back office money question. But it is a money question which will eventually have an impact on the passengers. And that’s nearly always a bad thing.
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