It has been more than two years since Delta effectively killed its interline agreement with American. Now, after several painful operational messes, Delta has finally agreed to bring the most important pieces of that deal back to life. Going forward, if Delta has problems and needs to put passengers on American flights, it can once again do it. The reverse is true as well. Considering how long it’s been since the agreement was cut and how long it’s been since the talks to reinstate started, this doesn’t seem like it was an easy thing for Delta to admit was necessary. But it is in the best interests of Delta’s customers, so we should celebrate the airline finally doing the right thing.
I know I’ve explained this before, but it’s worth including in this post. An interline agreement allows three basic types of cooperation between two airlines.
Airline A can sell tickets with Airline B flight segments on them (and vice versa)
Airline A can check bags through to Airline B flights (and vice versa)
Airline A can reaccommodate disrupted passengers by sending them to Airline B on an agreed upon rate (and vice versa)
This agreement allows funds to be settled up by the industry’s clearinghouse on the back-end after travel is completed. It’s an ancient airline industry function that has been reliably used for decades.
Between Delta, American, and United, the first two bullet points aren’t really a big deal. Those kind of agreements matter in complementary networks where you may want to feed passengers to another airline to complete a journey. Think about how JetBlue and Alaska feed foreign airlines at their US gateways. Even a big airline like Delta can benefit from this type of agreement because it can’t fly everywhere. For example, we just sold a ticket at Cranky Concierge that was on Delta connecting to ANA in Tokyo to get to Okinawa. But between Delta, American, and United, there’s more overlap than anything else. It’s potentially convenient to book American one way and Delta the other and put that on the same ticket, but most of the low fares on these guys aren’t combinable in that way anyway. It’s nearly always going to be cheaper to just book the one ways separately. Further airlines won’t check bags to each other outside of their alliances unless everything is on the same ticket.
It’s really that third bullet point that matters the most. There are industry standard rates that airlines use to settle up when they send a passenger over to another airline when there are operational issues (delays, cancellations, etc). And up until 2015, Delta, American, and United all used this process with each other frequently.
Back in 2015, Delta was feeling pretty good about itself. Its operation was running rather well while American and especially United were struggling. Delta looked at its interline agreements with both carriers and thought it had the upper hand. It decided to use its leverage and squeeze more money out of the other two. That worked for United, which caved to Delta’s demands. But American? Not so much.
I can’t say that approach made much sense to me. After all, Delta was benefiting by filling up seats at the last minute that would have otherwise gone empty. Sure there are some operational headaches involved, but on the whole, it should have benefited Delta nicely.
Over the last couple of years, Delta continued to have a great operation, but American and most notably United began to creep up. While Delta never fell off a cliff, it had some very public breakdowns on top of the regular weather issues that can cause problems from time to time. There was August 2016’s power outage at Delta’s operations center that caused the airline to melt down. Then there was last January’s computer outage that grounded Delta flights. Let’s not forget April 2017’s big Atlanta thunderstorm event which caused problems for days. Not that they could care less, but at the time I made a plea on the blog for the airlines to bring back their agreement. I kept up my quiet, meaningless campaign.
I understand that after these events, Delta started to believe in the importance of having the ability to put people on American. The airline approached American to open up talks, but for some time, there was no agreement. And of course, more problems occurred. Most recently there was the fire at Atlanta’s airport that caused the power to go out, obviously impacting Delta more than any other airline. At the time, I said this:
While the local passengers in Atlanta were screwed no matter what, Delta could have put the person flying from, say, Richmond to Austin on an American connection via Charlotte or Dallas/Ft Worth and kept them out of the Atlanta mess. That would have been good for the traveler, and it could have helped Delta to free up capacity for people who need to get in and out of Atlanta itself.
Around that same time, I started hearing whispers that an interline — or at least a reaccommodation — agreement was coming back imminently, but then… nothing. While the finish line may have been near, negotiations obviously hit a snag.
Here we are a month later, and an agreement has been reached. My understanding is that it’s at industry-standard rates, but this isn’t an industry-standard interline agreement, despite what you might interpret from American’s not-entirely-clear statement:
American and Delta have agreed to terms on a new interline agreement, which takes effect Jan. 24, and will give the airlines the option of rebooking customers onto each other’s flights in the event of unexpected flight disruptions. While this gives our team members another tool to re-accommodate customers, our priority will always be to keep customers on American or our alliance and joint business partners.
Delta explained it more clearly:
Delta and American Airlines will instate a new ticketing and baggage agreement designed especially for handling of customer reacommodation during irregular operations. The new ticketing and baggage agreement will allow both carriers to rebook customers impacted by irregular operations on one another’s flights. In 2015, Delta terminated its legacy interline agreement with American. Other aspects of that legacy agreement, including fare combinability for travel agency and other third party sales, will not return.
In other words, this will only focus on helping passengers who are stuck and have no other options. I can only assume this was done this way so that Delta could still justify charging United more to have a proper interline agreement. But if I were United, I’d be marching into Atlanta asking for the same deal American got since the rest is just fluff.
As far as I’m concerned, all that matters is that Delta and American can now put passengers on each other when things go wrong. There’s less and less that differentiates the legacy carriers from the low cost carriers every day, but one difference that remains is the ability to put a passenger on another airline when something goes wrong. That’s valuable, and even if it took 2 years, I’m glad to see Delta finally recognize it.