Beginning of the end for multilateral interline?
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Beginning of the end for multilateral interline?
Received this today from an ex-colleague:
If I'm not mistaken this the first interline agreement cancellation by major legacy airlines. One will no longer be able to buy an AA, or DL, ticket for travel including the other airline.
Inevitable, I suppose, but a loss for consumers.
Blurb to AA staff:
Dear Airport Agents, Premium Services Representatives and Reservations Representatives,
[...]
As you know, we’ve been very focused on ensuring that we have strong service recovery programs in place to help during those times when the weather isn’t on our side or when other disruptions to our operation occur. 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.)
While this is a change, it will not affect our commitment to reaccommodate customers during irregular operations. The new American now has the world’s largest and best network and our team is doing a great job of running a reliable airline. With nine hubs and gateways and nearly 7,000 daily flights, we have more ability to re-route our customers during operational disruption than any other airline in the world. We also have options with our joint business and oneworld partners, plus we have an interline agreement with United, which has the second largest network, and many other airlines, such as Alaska Airlines.
[...]
Dear Airport Agents, Premium Services Representatives and Reservations Representatives,
[...]
As you know, we’ve been very focused on ensuring that we have strong service recovery programs in place to help during those times when the weather isn’t on our side or when other disruptions to our operation occur. 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.)
While this is a change, it will not affect our commitment to reaccommodate customers during irregular operations. The new American now has the world’s largest and best network and our team is doing a great job of running a reliable airline. With nine hubs and gateways and nearly 7,000 daily flights, we have more ability to re-route our customers during operational disruption than any other airline in the world. We also have options with our joint business and oneworld partners, plus we have an interline agreement with United, which has the second largest network, and many other airlines, such as Alaska Airlines.
[...]
Inevitable, I suppose, but a loss for consumers.
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I suspect, though don't know for sure, that the offender here is Delta. For some years there have been flight in combination with other airlines in the USA. I hesitate to use the term "codeshare" which implies a formal connection, like OneWorld or SkyTeam.
However, on several occasions in my family, Delta have simply been uncooperative dealing with anything unusual if their flight was booked on another's site, or if the leg was flown on another airline.
However, on several occasions in my family, Delta have simply been uncooperative dealing with anything unusual if their flight was booked on another's site, or if the leg was flown on another airline.
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Well, it takes two to tango. I'm reluctant to lay the blame on one or the other. But it is a pity to lose the facility to buy one ticket on two or more airlines in a single transaction and in a single currency.
It's too bad that IROPS payments are at the heart of this, as that is only part of the story. Surely they could have agreed to disagree on this aspect, but maintain the ticketing agreements.
(IIRC - IROPS is not part of the multilateral interline agreements)
It's too bad that IROPS payments are at the heart of this, as that is only part of the story. Surely they could have agreed to disagree on this aspect, but maintain the ticketing agreements.
(IIRC - IROPS is not part of the multilateral interline agreements)
Paxing All Over The World
Looking at subject of closing an interline agreement: My cynical guess is that someone has worked out that they are not getting the financial benefit of the balance. They have calculated that they do more of something than another, or that it costs them more to administer or something.
The end result is to show that, by cutting this out they can save $$$ per annum. They will consider saving that across (say) three years to be worth any possible bad customer reaction.
Also, with this kind of subtle change, the fall out will not be seen for a long time and, largely unquantifiable. That for the simple reason that they will no longer be doing this activity so they don't have to count it and just count the 'savings'.
I could go on but I think you know the story ...
The end result is to show that, by cutting this out they can save $$$ per annum. They will consider saving that across (say) three years to be worth any possible bad customer reaction.
Also, with this kind of subtle change, the fall out will not be seen for a long time and, largely unquantifiable. That for the simple reason that they will no longer be doing this activity so they don't have to count it and just count the 'savings'.
I could go on but I think you know the story ...
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BKS - I'll have a go ..., but
When an agent books an itinerary using a GDS it will look to see what flights (nonstop, online, interline) are available. After selecting the flights the customer prefers the GDS will price it. It will look for the lowest possible 'valid' fare. Valid fare means the journey meets all of the various fare conditions attached to a particular fare. Some of the lowest fares restrict the combinability with other fares, or require that the ticket be issued on the 'paper' of the transporting airline. (Why these restrictions may exist is a subject of yet another pricing thread).
BMid and Brymon must have had an interline agreement (likely the IATA Multilateral Interline Traffic Agreement - MITA). So when the GDS finds combinable fares it prices the journey and issues the ticket on one of the two airlines (usually the first). A clever agent may look for a lower combination of non-combinable fares and if that is a better price, will issue two tickets - one on each airline.
In the good old days most airlines would interline baggage (and issue boarding cards; etc) even when two tickets had been issued. The MITA agreement, as a matter of law, only applied when a single ticket (single contract) had been issued, but airline check-in staff weren't bothered by the technicalities. That changed about 10-15 years ago following a dispute between two LHR based airlines. The smaller of the two was having their claims for baggage losses refused by the larger because of dual-ticketing. So the smaller began to refuse baggage from the larger if a single PNR/ticket did not exist. Now, most airlines will not accept interline baggage unless a single ticket/contract exists. There are exceptions of course, for on-line and alliance interline, but you need to be a detective to know who does what.
When an agent books an itinerary using a GDS it will look to see what flights (nonstop, online, interline) are available. After selecting the flights the customer prefers the GDS will price it. It will look for the lowest possible 'valid' fare. Valid fare means the journey meets all of the various fare conditions attached to a particular fare. Some of the lowest fares restrict the combinability with other fares, or require that the ticket be issued on the 'paper' of the transporting airline. (Why these restrictions may exist is a subject of yet another pricing thread).
BMid and Brymon must have had an interline agreement (likely the IATA Multilateral Interline Traffic Agreement - MITA). So when the GDS finds combinable fares it prices the journey and issues the ticket on one of the two airlines (usually the first). A clever agent may look for a lower combination of non-combinable fares and if that is a better price, will issue two tickets - one on each airline.
In the good old days most airlines would interline baggage (and issue boarding cards; etc) even when two tickets had been issued. The MITA agreement, as a matter of law, only applied when a single ticket (single contract) had been issued, but airline check-in staff weren't bothered by the technicalities. That changed about 10-15 years ago following a dispute between two LHR based airlines. The smaller of the two was having their claims for baggage losses refused by the larger because of dual-ticketing. So the smaller began to refuse baggage from the larger if a single PNR/ticket did not exist. Now, most airlines will not accept interline baggage unless a single ticket/contract exists. There are exceptions of course, for on-line and alliance interline, but you need to be a detective to know who does what.
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PAXboy,
If I understand correctly the dispute between DL/AA relates to the settlement when a pax is involuntarily rerouted from one to the other. This isn't something the MITA covers - it's either a bilateral deal, or the receiving airlines is entitled to what the delivering carrier would have got.
It's a pity because an interline agreement allows much more than invol reroute. Through checking of luggage being the most obvious but the ability to issue a single ticket/contract for a journey involving the other airline is where the consumer is going to get it in the ear.
Yes I'm a dinosaur, the days of airlines cooperating to make travel easier are long gone. Expect to see others bailing out of MITA because it isn't in their interests.
If I understand correctly the dispute between DL/AA relates to the settlement when a pax is involuntarily rerouted from one to the other. This isn't something the MITA covers - it's either a bilateral deal, or the receiving airlines is entitled to what the delivering carrier would have got.
It's a pity because an interline agreement allows much more than invol reroute. Through checking of luggage being the most obvious but the ability to issue a single ticket/contract for a journey involving the other airline is where the consumer is going to get it in the ear.
Yes I'm a dinosaur, the days of airlines cooperating to make travel easier are long gone. Expect to see others bailing out of MITA because it isn't in their interests.
Paxing All Over The World
Thanks ExXB for the more detailed explanation. My experience in commerce tells me that:
- Company A: perceives they can save money by a certain action and break with the past.
- Company B: follows, being 'relieved' that someone else has broken the line first.
- Companies C~X: follow.
- Company Q: sess the possibility to introduce a feature that will bring a customer service advantage. They promotes it as if it had never existed before
- Company J: follows, not wanting to be left out.
- ... ... ...
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Off the top of my head, SK and BA terminated their interline agreement in May 2012, VS and the Lufthansa Group terminated their interline agreement at some point in 2013 too. I know EI also do not interline with LX and SN, but unsure if this extends to the wider LH group and quite when that was severed, I don't know, but it most certainly doesn't exist anymore.
Bad for the passengers of course, especially in major hubs for any of the above carriers as when irregularities hit it just limits the options on hand. Never mind through checking of baggage, which is also a benefit of course, but when it all goes wrong and you just want to get people on their way, it is frustrating being on the other side of the desk and seeing so many available seats you just can't utilise!
Paxing All Over The World
edi_local OUCH! Certainly would not want to be on the other side of the desk. It seems that this is another step in the move away from what we all grew up with. The change from Multilateral to Bilateral (thanks ExXB) will certainly make things complicated for staff, as they have to check the system for each pax to see what might be possible.
Now, I absolutely understand that companies change and I do not expect everything to stay the same as it was when I was first a pax in 1965! But the chipping away at customer benefits for short term gain does not usually work out well ...
Now, I absolutely understand that companies change and I do not expect everything to stay the same as it was when I was first a pax in 1965! But the chipping away at customer benefits for short term gain does not usually work out well ...
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The crazy thing is that much of this will depend on which airline issued the ticket. As an example two pax are travelling on the VS/DL code share flight LHR-ATL and both are connecting to a DL flight ATL-DFW. One pax has a VS issued ticket, the other a DL ticket.
The flight is delayed and the pax misconnect. The next available flight is AAs. The pax with the VS ticket can be rebooked onto it, but not the passenger holding the DL issued ticket.
I really hope these guys know what they're doing.
The flight is delayed and the pax misconnect. The next available flight is AAs. The pax with the VS ticket can be rebooked onto it, but not the passenger holding the DL issued ticket.
I really hope these guys know what they're doing.
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I am not so sure if the VS ticket will be rebookable as the DL system itself may reject any attempted booking of an AA segment.
For example, LH and BA interline, a passenger may fly SK on an LH Miles and More ticket, but then misconnect in LHR. SK still won't be able to rebook on to BA as their reservation system won't issue a ticket for any airline they don't interline with, even in an irregular situation and even if it's not their ticket originally.
It all depends how it's set up, but in my ticketing experience (4 airlines across the 3 alliances, on 3 different reservation systems), if there is no interline agreement then the system physically won't even let you book and issue new tickets regardless of the reason, even if you try and trick it into taking a codeshare flight number. A FIM would be rejected by the accepting carrier if no interline agreement exists too, so even manual ticketing is a no no.
AA/DL must have a work around though as they are honouring tickets issued up to the date of the termination. Quite how that would go down if you have a family or other group who booked separately and happened to fall either side of the cut off date, I don't know, but it suggest to me that there will be nothing physically inhibiting rebooking on to one another until much later on. It may just be a case of agents having to stick to the rules, unless AA/DL have a fare more sophisticated system than I've ever used and it automatically works it out!
For example, LH and BA interline, a passenger may fly SK on an LH Miles and More ticket, but then misconnect in LHR. SK still won't be able to rebook on to BA as their reservation system won't issue a ticket for any airline they don't interline with, even in an irregular situation and even if it's not their ticket originally.
It all depends how it's set up, but in my ticketing experience (4 airlines across the 3 alliances, on 3 different reservation systems), if there is no interline agreement then the system physically won't even let you book and issue new tickets regardless of the reason, even if you try and trick it into taking a codeshare flight number. A FIM would be rejected by the accepting carrier if no interline agreement exists too, so even manual ticketing is a no no.
AA/DL must have a work around though as they are honouring tickets issued up to the date of the termination. Quite how that would go down if you have a family or other group who booked separately and happened to fall either side of the cut off date, I don't know, but it suggest to me that there will be nothing physically inhibiting rebooking on to one another until much later on. It may just be a case of agents having to stick to the rules, unless AA/DL have a fare more sophisticated system than I've ever used and it automatically works it out!
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ExXB...many thanks for taking the trouble to give an informative reply which has helped solve a puzzle I've had for many years.
For those of you who don't know what I'm talking about, I removed the question before ExXB's reply appeared as I decided it was thread drift.
For those of you who don't know what I'm talking about, I removed the question before ExXB's reply appeared as I decided it was thread drift.
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Thanks for being so careful BKS Air Transport, I think this is a really interesting thread and it's fine if it broadens slightly.
This kind of 'adjustment' to the Ts&Cs is going to upset a lot of folks in the next couple of years. Not least because they won't know about it unless/until they misconnect.
Some of you may have noticed a post in the http://www.pprune.org/airlines-airpo...twick-142.html thread # 2827 by the ever vigilant PAXboy (what does he do all day?) about an insurance scheme that LGW have put in place. This is commented upon as not being a global first but seems like the next boom for the travel insurance market ...
This kind of 'adjustment' to the Ts&Cs is going to upset a lot of folks in the next couple of years. Not least because they won't know about it unless/until they misconnect.
Some of you may have noticed a post in the http://www.pprune.org/airlines-airpo...twick-142.html thread # 2827 by the ever vigilant PAXboy (what does he do all day?) about an insurance scheme that LGW have put in place. This is commented upon as not being a global first but seems like the next boom for the travel insurance market ...
As just a pax nowadays, this refusal to do what can be done is annoying.
Earlier this year I flew from LHR to SYD via HKG. Virgin to HKG and Cathay to SYD. Cathay booked the AKL to HKG return, but operated by ANZ.
The booking lady from Virgin was helpful. She pointed out that she could sell me a Cathay ticket, but it would be (much) cheaper if I bought it myself. (It was much cheaper).
I asked whether or not I would get both boarding cards at LHR.
The Virgin lady said that whilst they could do that, and whilst they might, it was very unlikely.
So the risk of missing the connection was ours.
Needless to say, I was not booked through. We took the risk, but all was fine.
As a PS , the much vaunted ANZ actually operated the AKL flight to HKG. The cabin crew had obviously been trained by United. The grumpiest lot it has been my misfortune to encounter. Dire.
Earlier this year I flew from LHR to SYD via HKG. Virgin to HKG and Cathay to SYD. Cathay booked the AKL to HKG return, but operated by ANZ.
The booking lady from Virgin was helpful. She pointed out that she could sell me a Cathay ticket, but it would be (much) cheaper if I bought it myself. (It was much cheaper).
I asked whether or not I would get both boarding cards at LHR.
The Virgin lady said that whilst they could do that, and whilst they might, it was very unlikely.
So the risk of missing the connection was ours.
Needless to say, I was not booked through. We took the risk, but all was fine.
As a PS , the much vaunted ANZ actually operated the AKL flight to HKG. The cabin crew had obviously been trained by United. The grumpiest lot it has been my misfortune to encounter. Dire.
Interlining was pretty much what killed BMI financially, being Star Alliance they got all the interline connections at Heathrow to UK domestic and near European points, but by virtue of the way that through fares are divided between carriers where there is a long haul and a short haul, just didn't get adequate revenue. For carriers like BA who have both long and short haul through Heathrow, it's just an internal accounting exercise, but for BMI who didn't have the long haul it was different. BMI also got stuck with all the costs of mishandled baggage, it being the final carrier who bears this cost as they have the local presence, but if say Air Canada decided to leave some bags off in Vancouver because they had a heavy cargo load and were beyond MTOW, it was BMI who got stuck with the bag repatriation costs at Aberdeen or wherever.
Having said that, in the USA, now we are down to a minimum set of oligopolist carriers who pretend they serve every journey but in practice do not, it falls to the FAA as the regulator of what remains to be regulated to ensure that passenger convenience is not further stripped away in a search for ever greater margins. They seem to be conspicuously failing in this, constantly being out-manoeuvred by the mega carriers' many lobbyists in Washington. It seems about time for a different head who understands what a government needs to do in such a minimum carrier choice situation that they allowed.
Having said that, in the USA, now we are down to a minimum set of oligopolist carriers who pretend they serve every journey but in practice do not, it falls to the FAA as the regulator of what remains to be regulated to ensure that passenger convenience is not further stripped away in a search for ever greater margins. They seem to be conspicuously failing in this, constantly being out-manoeuvred by the mega carriers' many lobbyists in Washington. It seems about time for a different head who understands what a government needs to do in such a minimum carrier choice situation that they allowed.
