Delta feels it's in the position to play hardball with American. It may be, but it feels more like playing hardball with passengers.
Two of the world’s three largest airlines, American and Delta, will no longer exchange passengers to help them reach their destinations in bad weather or during other disruptions. Delta wants more money from the larger airline than American is willing to pay.
The “interline” agreement between the two ends Sept. 15, although tickets already sold for trips beyond that date will be honored. Such agreements allow for multi-segment tickets on two airlines—for example, flying Delta from Atlanta to Los Angeles, and then American from Los Angeles to Honolulu.
Perhaps more important, these agreements allow airlines to book their passengers and baggage onto another airline during poor weather. When a storm hits, airline passengers typically bum-rush airport gate agents, frantically hunting for a way out of town. That’s where your American flight can become a United flight or vice versa. And that’s where interline agreements come into play.
The dispute over the carriers’ pact comes as Delta has been touting the reliability of its operation, with the best on-time arrival and flight cancellation rate among the large network carriers. On that basis, Delta sought a higher payment for each passenger it accepts from American and United, arguing that those two carriers need its open seats far more than it needs theirs. United, which has been sending more passengers to Delta than American does, agreed to those terms in August, Delta spokesman Anthony Black said Friday.
In July, American sent five passengers to Delta for each passenger Delta sent to American, Delta said Friday. American spokeswoman Jenna Arnold said July was “an outlier” due to storms at the airline’s hubs and that the ratio of passenger exchanges varies month to month.
In April, the Airlines Clearing House, a not-for-profit company the airlines own to settle financial accounts among one another, set a new rate for passenger swapping for carriers that have interline agreements. The payments are set using a stage-adjusted mileage formula based on the flight on which an airline is booking its passenger. Given the disparity of recent passenger flows among Delta, American and United, the Atlanta-based airline sought more beneficial terms. “Basically, we’re backstopping their operation, so throw us an extra bone or two,” Black said of Delta’s reasoning.
American and United still have an agreement to exchange passengers; Arnold said the company also has such agreements with nine domestic airlines. “The main thing is we have plenty of options in these situations,” she said.
Southwest Airlines, which carries the most domestic traffic, does not have an interline agreement with any of its Big Three rivals. In certain situations, airlines will buy a full-fare ticket on a rival carrier to help a passenger reach his or her destination.
This article was written by Justin Bachman from Bloomberg and was legally licensed through the NewsCred publisher network.
Photo credit: An American Airlines jet passes the Washington Monument as it lands at Ronald Reagan National Airport, in Washington, D.C. Mark Lennihan / Associated Press