It’s Time for American and Delta to Reinstate Their Interline Agreement

I’ve wanted to write this post for a long time. In fact, I’ve had a blank post with this title sitting in my drafts folder since December. Now, the timing seems perfect considering the massive operational problems Delta faced last week when storms sat on top of Atlanta and the northeast (and incredibly, continues to face in some ways). There is less and less differentiating low cost carriers from legacy airlines every day, but the ability to reacommodate when things go wrong is still one of the more important differences. In 2015, Delta decided its operation was so good that it wasn’t as concerned about having agreements with other airlines. The end result was that American and Delta broke ties so they could no longer put stranded travelers on each other. This has gone on long enough. Figure it out, guys.

I wrote about this back when the airlines broke off their agreement, but it’s worth rehashing a bit of it here.

Since the dawn of time (or something like that), airlines have had interline agreements with each other. This allowed them to issue a single ticket covering flights from both airlines, check bags through to each other, and reaccommodate passengers on each other when things go wrong. The first two are important today for airlines like JetBlue or Alaska which rely on partnerships with global airlines to get their customers where they need to go. But between the big legacy carriers, it’s not as important as it used to be. The last piece, being able to reaccommodate people on each other when things go wrong, is valuable.

The way it works is fairly simple. If two airlines have an interline agreement, they can either accept the other passenger at face value of the ticket or they can do it at a set percentage of a high fare. These things all get settled behind the scenes through an industry clearinghouse, so for the traveler and customer service rep, it’s easy to handle.

Low cost carriers have never really gone down this route. Historically they focused on, well, keeping costs low, and that meant avoiding things like checking bags to different airlines and giving away revenue to another airline in times of trouble. Southwest today still can’t do it, so when things go wrong, it either has to buy a new, expensive last-minute ticket or it has to tell passengers they can either wait for the next Southwest flight or get a refund and find something on their own. It’s not great for anyone. Southwest will finally have the ability to enter into these agreements with its new reservation system, but when you think about ultra low cost carriers like Spirit, Allegiant, Ryanair, or easyJet, this just hasn’t been something they’re willing to do.

In this era of a la carte pricing and Basic Economy fares, the gap between legacy and even ultra low cost carriers has narrowed from a passenger perspective. But as mentioned, the ability and willingness to help passengers fly other airlines in times of trouble to me is one of the more valuable differentiators.

Back in 2015 when Delta was running that fantastic operation, it decided to get greedy. It noted that with United and American running far worse operations, it was taking many more passengers from them than they were taking from Delta. And so Delta thought it could make a money-grab and jack up the rates it charged United and American to take their stranded passengers. I had trouble following that logic, but apparently Delta thought it made perfect sense.

The reactions were very different. United caved and agreed to the higher rate. As its operation has improved, I’m sure the lopsided nature of the relationship has begun to settle out. But it’s very expensive when things do go wrong, so presumably it’s a last resort. In some cases, they may opt not to use each other at all.

American, on the other hand, told Delta to pound sand. It wasn’t going to agree to this and so the deal ended. Delta has generally continued to run a very good operation, but American and United are catching up. In the meantime, Delta has had some spectacular failures. There were the two computer outages in the last year which snarled operations for days. And then there was this storm last week that really messed things up.

Yes it’s true that Atlanta had bad storms last week, but Delta wasn’t able to prepare itself for a quick recovery. Days later, on Saturday, Delta had still canceled hundreds of flights. The airline kept delaying and delaying before canceling, making customers angrier and angrier every time. Phone lines were jammed; everything was gridlocked. Delta agents scrambled to find any remaining seat during the already busy Spring Break travel period, but many people were just out of luck. I bet Delta sure wished it could have routed some of those people on American to get them on their way.

Having the ability to put people on the other big US airlines is an important tool, not only for customers but for employees too. You think Delta’s front line people are having a good week telling their customers that if they want to get that seat on American they’re on their own? Nope.

There are some things that are negotiable, but this shouldn’t be one of them. Go back to the status quo, accept industry standard settlement, and stop screwing around with customers and employees. With lower rates, even the airlines that do have agreements with each other will be more inclined to send people to the other airlines when things go wrong. This should be one of the big differentiators for a legacy airline. Now go make it happen so we don’t run into this the next time there’s a meltdown.

Get Posts via Email When They Go Live or in a Weekly Digest

Leave a Reply

56 Comments on "It’s Time for American and Delta to Reinstate Their Interline Agreement"

avatar
Sort by:   newest | oldest | most voted
David
Guest
Either in 2015 or 2016 I took a short haul flight with Easyjet from London (possibly to Copenhagen but I’m not 100%). I definitely remember cabin crew talking quite explicitly how the aircraft had to wait so they could board some passengers from a British Airways flight that had been cancelled at fairly short notice and who were being reaccommodated to Easyjet. I’m pretty certain it wasn’t a case of BA staff being on strike – I remember being surprised at the time that there seemed to be some sort of agreement between BA and Easyjet that they would accept… Read more »
Itami
Guest
It’s an interesting conundrum, that’s for sure. While an interline agreement is obviously helpful in a worst-case scenario like last week, if there is a significant gap in operational performance between carriers then a fixed rate reaccommodation could hypothetically end up displacing a lot of last-minute bookings with less valuable fares. Obviously there’s a cost benefit analysis involved in weighing the two considerations, but that must have been part of the original rationale behind DL trying to change the terms of the agreement. Maybe the best compromise is through some kind of variable pricing system for interline rebookings. Like instead… Read more »
jaybru
Member
Of course interline agreements as you discuss should exist, not just between AA and DL, but between every carrier of any decent size It should be written into law that every carrier of such and such size shall provide for interlining (now, define exactly what that all means so any airline customer can know and understand it) with every other carrier of such and such size. (DOT can define size, as it does it for all sorts of rules.) Unless an airline has a valid reason–incompetency, not being one of them)–it should be stripped of its authority to operate without… Read more »
catherine.burnett
Member

Really? It should be written into law? The airline industry is the most regulated industry out there, and I find it hard to read “it should be written into law” that air carriers, who have competing interests and who operate with a very small margin, should be required to interline with other competing air carriers. That’s one of the factors–whether an air carrier has interline agreements–that a consumer should consider when purchasing an airline ticket. Southwest has been operating for years and years with no interline agreements, and their customers keep coming back.

Oliver
Guest

“whether an air carrier has interline agreements–that a consumer should consider when purchasing an airline ticket”

Can you point me to where I can find this information on Delta.com or Southwest.com or.. ?

catherine.burnett
Member

I’d start with each carrier’s contract of carriage.

jaybru
Member

Catherine, with all due respect, etc., etc., you’ve heard that all before. Your sentence that begins: “The airline industry is….” has been used by A4A a million times when it comes to anything touching on rulemaking and our dear airline industry. If you work there, fine! Me, a non-lawyer, I have always wondered exactly when the contract of carriage kicks in to control my life…like even before I purchase anything and am simply checking my OAG for flight options?

Agreeing to disagree, I guess.

Tim Dunn
Member
With all due respect, I think most of us have paid as much attention to conditions of carriage as we have to the terms and conditions of credit card applications, internet access, insurance policies and a million other things in life. Companies have to create pages and pages of documents because of lawsuits and then nobody reads them – and we act surprised when companies do something that they told us they would but we didn’t bother to read. Most US airlines don’t say they will protect you on other airlines if necessary but that doesn’t mean they won’t. btw,… Read more »
southflniceguy
Member
I’m a small government guy but interline should be federally regulated. Transportation is inherently a cartel due to limited rail or air space and is properly regulated not only for scarcity but to its broad economic impacts if disrupted. Too much economic activity is lost while transportation capacity exists via interline. It’s the same reason s president can delay s transportation strike and force arbitration. Interline should be required via a board of some sort. Better yet would just be s threat of federal action but Airlines voluntarily setup such a board maybe given a legislative antitrust waiver. Just like… Read more »
Don livin
Member

So the Government should rule on interline agreements and related issues. Sounds like you join me in being disappointed that Kennedy, and Alfred Khan takes Carter and coordinators. Into the Airline Deregulation Act in 79z

Don livin
Member

CQN: Talked Teddy, Alfred and Jimmy into Airline Deregulation. That changed the industry into a “Mass Transport Industry”.

Davey
Guest
Cranky, this is another pre-deregulation artifact that has been sacrificed on the altar of cost efficiency. For years, what separated United, American and Delta and their legacy peers from the low-cost johnny-com-latelys has been service. If you were on United or Delta, you knew they were a step-up and that they truly cared, or at least made an effort. Not any more. Cash flow is king. Using ARC and interlining to handled stranded passengers, even with high-value passengers, severely cuts into cash flow. Why give to Delta when you can tell a passenger you have to sit around an airport… Read more »
Alex Hill
Member
I think it’s a bit different than that. It’s an artifact of a time when no US carrier was big enough to connect essentially any point in the US with the vast majority of destinations (weighted by passenger traffic) in the world. Now, when you include codeshare partners, all of the US big three carriers can do that. So AA doesn’t need interline traffic with Pan Am to serve Asia or whatever. Therefore, the number of potential customers that DL loses by not having an interline agreement with AA is relatively small and may be less than the revenue DL… Read more »
Davey
Guest
There was a time in the 1990s — after deregulation and when Southwest was in its infancy — when one of the airlines advertised that they would work with you, even if it meant putting you on another airline. Alex, you’d be right if the originating airline without an interline agreement had enough positive space to move people around. But as the ORD-SDF incident with United showed yesterday, there isn’t anywhere near enough positive space on a nearby flight to make a difference. The industry is cheap — sorry. They have to be because their margins are so thin. Every… Read more »
Tim Dunn
Member
United decided to accept Delta’s higher rates and carried buckets of cash home over the past five days but American told Delta to pound sand because of higher rates and now Delta is the loser? say what? Let’s be VERY clear here. American chose not to accept Delta’s higher rates and the interline agreement was cancelled. If American was so certain that it could benefit then they should have retained the agreement knowing they would benefit one day. As American’s operation has improved, they are probably sending less passengers to Delta anyway. The interline agreement was cancelled between AA and… Read more »
DDD
Member

My understanding is that, previously, AA and/or UA were overbooking DL’s flights when they ran into difficulties at the agreed upon discounted rates, and then under the new compensation rules, DL was having to pay off passengers (due to the overbookings) at the new, higher, government required rates, $1300 I believe. It just didn’t make sense for DL at the time.

Tim Dunn
Member
supposedly also Americn was sending passengers to Delta without bags which meant that Delta was delivering bags for many of the passengers who checked bags with American, inflating Delta’s costs which Delta said it had to recover in order to agree to carry AA passengers. Given that American’s baggage handling rates have been worse than Delta’s for years, both reasons are plausible. Either way, it was a mutual decision by both AA and DL based on the same type of fare increase which has occurred many times in the industry with individual customers. AA just represented a large customer that… Read more »
Dan
Guest

Oops. Those kinds of baggage shenanigans also take a hit on the DOT scorecard. Longstanding rules dictate that the last carrier to handle the passenger takes the mishandled bag hit, so there’s some big time impacts of AA sending passengers to DL without bags.

Adam
Guest

If that was the case then DL could refuse that pax outright.

Nick Barnard
Member

Or DL could make AA’s passengers reclaim their bags and recheck them at the DL counter..

Adam
Guest

You have to remember to ask them if they have bags. Sometimes the pax will “forget” because claiming they do will get them kicked back and back into the AA line.

garyedel
Member
I hope there is a future posting on what when wrong at Delta. I was delayed 7.5 hours on Friday on an ATL to MKE flight. 4 hours were apparently a “baked in delay’ from weather, but then we had 3 hours waiting for a single flight attendant to round out the crew. I was perplexed that in the metro Atlanta area is was difficult to find spare FAs given how many reside in the metro area. I even had a friend who was a Delta FA assigned to teach that week. Why Delta doesn’t cancel routine training classes and… Read more »
Dale
Member
There are Federal Aviation Regulations that dictate how long crews can work and how long they must rest. They also dictate “24 in 7” meaning that crews have to have a 24 hour break in 7 days. Based on monthly overlap and the timing of the storms, it may have had a much bigger impact on what crew scheduling was able to do with crews. Also, crews are not “off the clock” for rest if the company can’t get them a hotel room. With storms impacting DL’s biggest base/hub, I can completely understand the delays/cancelations going for days after. While… Read more »
catherine.burnett
Member

Thanks for the concise response, Dale. I was going to write much of the same, but you spared me from doing so!

Dan
Guest
In all fairness, when there is a disaster in “healthcare”, people’s lives are probably on the line. During airline IRROPS, people probably won’t die. An airline has lots of things to consider — if FA’s are in a training class now and it gets canceled, there may be downstream effects much greater than operating a flight or two *right now*. Union contracts come in to play too. BTW, for a long time, airlines have kept “spare” flight attendants on duty. It’s just that when an airline announces there is a crew shortage, they’ve already exhausted the “spares”. You’ll actually never… Read more »
Tim Dunn
Member
If provide health care providers can refuse to provide non-emergency health care services if you don’t have “the right card” which might include a credit card, the chances of airlines being required to back up each other is somewhere between slim and none esp. given that it isn’t even required in Europe. At the worst, a customer is given his money back and has to find another way to their destination. When you have a health care issue and the wrong card, the outcome won’t be anywhere near as good as it is with failure to provide from any other… Read more »
vasukiv
Guest
I had to suffer through this last week. My flights from ABE to HOU via ATL last Wednesday were cancelled and the only good alternative was on AA via CLT (going to IAH instead of HOU). I had to bite the bullet and pay the one-way on AA. I managed to make the return on Friday with my originally scheduled DL flights but was delayed because of overbooking (they were looking for volunteers to stay in Houston for two days!) and late-arriving flight crews. A colleague who was travelling with me came back a day later and had to go… Read more »
A
Guest
In 15+ years of traveling for business I’ve had to use an interline agreement once…and it was prior to all the big mergers at that. Since then there have been a number of times I’ve had flights canceled or delayed and DL (among others) were able to reroute me and my delays have been relatively minor all things considered. Maybe I’ve been lucky and I do fly direct whenever possible, etc. That being said when I travel I plan for the unexpected, be it an extra night away or possibly driving a rental across the country to get home. If… Read more »
Dan
Guest

Well… if you’re always on a non-stop flight in a market with any sort of frequency, then a connection on another carrier is often less desirable than waiting for the next non-stop on your original carrier.

Bill Hough
Guest

Cranky: “Go back to the status quo, accept industry standard settlement, and stop screwing around with customers and employees.”

Somehow it’s OK for airlines to nickel-and-dime their customers to death, but in THIS ONE CASE they should go back to doing things the olde way.

Well, if the new normal is that air travel is going to suck, the lack of interline agreements just fits right in.

David SF eastbay
Member
Back when I worked for TWA, we had a list of carriers who to book for reprotects. The list started with carriers who accepted the ticket at face value to Delta who was to be used only under penalty of death (your own) since they would charge the full Y care. Also back then we could self ticket on Southwest for employee standby travel on them which I did many times, and reprotect passengers on Southwest. It wasn’t cool proof, as The passenger was just sent over to Southwest and put on flights if they had space, but Southwest would… Read more »
Kevin
Member

Where does Travel Insurance come into play? Seems like you’d be able to get yourself out of a jam and not rely on an airline for accommodation if you decided to purchase such insurance.

southbay flier
Guest

1) How bad were those thunderstorms to cause a complete meltdown of Delta? It’s not like thunderstorms are a rare sight in ATL.

2) Now that there is a new CEO at DL, I wonder if he’s more willing to deal with AA? He was abot to get a MOU from KE already.

iahphx
Member

As I was reading a wire service story this morning about Delta’s thousands of cancelled flights, the first thing that popped into my head was the AA interline agreement fiasco. Talk about penny wise and pound foolish. Obviously, they need to reimplement that deal with AA, and I suspect they realize that now. Of course, AA might tell them to go pound sand again. But I suspect Parker will be the bigger man and realize that, one day, AA is going to screw up big time, too, and would benefit from putting its pax on DL.

cblock2
Member
A friend of mine was visiting last week and scheduled to fly TPA-ATL-EWR on DL on Wednesday evening. His TPA-ATL flight was delayed so badly it would arrive after he departed, e-mail offered a change to Thursday, after he spent a few hours trying to get through on phone lines. He couldn’t leave Thursday, but a later e-mail offered another change to Friday. Come Friday, once again his outbound flight was so badly delayed he would have arrived after his connection left, but this time the system didn’t offer any re-accommodation, and phone lines were still a mess. We wound… Read more »
Jane
Guest

Yes, regulation was good. If you were an airline, you had to take care of all passengers. Interlining was mandatory. End of story.

Time to regulate airlines back into shape and Make America Great Again.

Jim
Guest

Regulation wasn’t so good if you were one of the bottom 90% of society that couldn’t afford to fly.

Eric A.
Member

I believe there are two options:
1. Disclosure at the POS that this fare bucket is only valid for transportation on ### airlines and in the event of irrops travel may be delayed.
2. Work out a framework within IATA that sets a floor and cap on interline fees that cover costs but do not inflict an undue financial burden.
2A: be proactive and keep Congress out of it. We have seen how well-intentioned legislation plays out (1200 hour rule).

Tim Dunn
Member

IATA has no power to govern fares in the United States. The US does not allow US airlines to participate in discussions that allow cooperation on fares if there is a joint venture involved.

Congress got out of the business of economic regulation of US airlines in the domestic marketplace in 1978. They aren’t ceding that authority to anyone.

The marketplace will determine what happens.

If AA and DL want to have a ticketing agreement, they can have one at the price both agree to.

If WN wants no agreements, the marketplace will determine if they are right.

Nick Barnard
Member

AFAIK, If airlines are buying and selling services to each other, its not really cooperation on fares, its a mutual service agreement.

Its one of those things they have to be careful on, but this isn’t an anti-trust issue.

Tim Dunn
Member
…but at rates that each party agrees to, not by a coordinated effort by the government or any non-governmental group such as a trade organization. it is exactly an anti-trust issue which is why airlines seek anti-trust immunity to talk about fares even with their joint venture partners. They can’t talk about domestic fares with any carrier AT ALL and they can’t even signal through industry analysts (the Obama DOJ tried to argue they were doing that). The only cooperation discussions on fare-related issues through a non-governmental agency such as IATA can be if no joint ventures are present in… Read more »
oldiesfan6479
Guest

“…be proactive and keep Congress out of it.”

Especially that idiot Schumer!

Dan
Guest

CF,

Yeah, I’m with you 100% on this one. While this type of thing may be of less benefit to a hub-captive passenger, if you’re flying from LAX-LGA, it really doesn’t matter who you fly or where you connect. You don’t want to be stuck in LA because ATL is having a bad weather day. (Or your carrier can’t recover from IRROPS three days ago.)

Tim Dunn
Member
1. It is always worth noting that Delta was not part of the mutual aid pact before deregulation that allowed signatory airlines to carry each others’ passengers in the event of a work stoppage, which usually was during strikes. Nearly all of the rest of the legacy airlines were part of the agreement. Delta was not. 2. It is also worth noting that Delta’s hub in Atlanta is not only the world’s largest but has approx. 75% more mainline flights and seats than even its closed hub competitor – AA at DFW. Delta operates on average over 760 mainline flights… Read more »
David M
Guest

I wonder if Delta being relatively weakly unionized meant that work stoppages/strikes were less likely to happen, and that factored into their decision to not participate in the regulation-era mutual aid pact?

Tim Dunn
Member

since DL has had something like one strike in its entire existence, probably so.

queenmumsd
Member

Wish they would change a lot of things, like their promise to take off the baggage prices when the fuel prices went down, go back to normal legroom in the seats oh no that never happened. Meanwhile they are making billions on baggage cost that they proudly report.

Tim Dunn
Member

Delta is refunding baggage charges for everyone whose bags did not arrive with them – that is their standard policy. Other airlines do that as well and some in Congress are considering requiring it.

PiedmontFH227
Member

Only a situation like Atlanta will make DL change it’s ridiculous policy. Seems enormously greedy without any regard to passenger inconvenience

wpDiscuz