There are different levels of cooperation between airlines. For example, the highest level of cooperation between airlines is a joint venture, whereby airlines share revenue for a given market. Below that you have codeshares, whereby airlines sell tickets on one another’s flights under their own “code.”
And then you also have airlines with interline agreements, which in reality is a pretty low level of cooperation. Basically this allows airlines to:
- Check bags when multiple airlines are involved which don’t otherwise partner
- Rebook passengers on one another in the event of irregular operations
- Handle passengers traveling on itineraries which require multiple airlines
Well, it seems like that was too much cooperation for American and Delta, as they’ll be discontinuing their interline agreement as of Tuesday, September 15, 2015.
American Airlines and Delta Air Lines are ending their interline agreement that allows them to sell tickets on each other’s flights as of Tuesday.
“We have been unable to come to terms on an agreement with Delta and, as a result, have mutually agreed to end our interline agreement effective Sept. 15,” American spokesman Casey Norton said Thursday evening. “From that date, neither airline will offer interline services to each other, including the ability to rebook passengers at discounted rates on the other carrier when flight disruptions occur.”
So what’s the real real for the interline agreement being discontinued? An internal memo sent out to American employees has an explanation:
One tool that we use to help get customers back on their way during irregular operations are the interline agreements we have with various carriers that allow us to reaccommodate passengers on other airlines at a negotiated rate. These agreements also allow airlines to book, sell, ticket, and check baggage on one another. Interline agreements are common across the industry and they generally include a standard, discounted rate for calculating how much is owed by one carrier to another to use their seats during irregular operations.
In April of this year, participating airlines across the industry agreed to new rates for moving customers between carriers during irregular operations. Delta recently decided to go outside of that joint agreement and negotiate an individual agreement with American. We have been unable to come to terms on an agreement with Delta and, as a result, have mutually agreed to end our interline agreement effective September 15. From that date, neither airline will offer interline services to each other, including the ability to rebook passengers at discounted rates on the other carrier when flight disruptions occur. (Note that we will continue to honor valid tickets already purchased on or before September 14 through the existing interline agreement, so there will be no changes there.)
It’s quite interesting that Delta is going outside the joint agreement for irregular operations to try and negotiate an individual agreement with American. My guess is that since Delta is operationally the best legacy carrier, they feel like they’re helping the other airlines too much by carrying their passengers in the event of irregular operations. This comes just days after Delta made a guarantee to their corporate customers that they’ll have better on-time performance than American and United.
Ultimately this isn’t a huge change, especially given how big the networks of the two carriers are. That being said, it’s still disappointing to see airlines unwilling to cooperate even in the event of irregular operations. And this seems to come down to Delta wanting more money for accommodating passengers from other airlines, which I don’t think surprises anyone.