This year has seen Emirates expand its global reach by establishing more interline agreements with various airlines, including Philippine Airlines. Similarly, Etihad has also entered into an interline agreement with PAL this year. While Qatar Airways opts to expand by inaugurating flights to multiple destinations, major global airlines like Emirates and Etihad pursue a different strategy. They focus on efficiency, partnering with local airlines to offer improved and seamless connectivity options for passengers.
Rather than competing head-on with local carriers at every destination, Emirates and Etihad have chosen the route of collaboration, creating beneficial outcomes for all parties involved. Qatar Airways, however, is determined to gain a competitive edge, often leading to disputes with fellow alliance members like Qantas.
So, what makes interlining the path forward for the aviation industry to thrive and better connect the world?
Interline Agreements
Interline agreements, first introduced by the International Air Transport Association (IATA) in 1947, have helped shape the airline industry into a global collaboration. In essence, these agreements simplify passenger service between two airlines, creating a smoother and more convenient experience for travelers. This cooperation covers an array of services, such as luggage handling, check-in processes, and even alternative flight bookings if necessary.
Over the years, the intricacies of these agreements have evolved, reflecting the growing complexity of the global air travel system. Interline agreements now cover various aspects of the airline partnership, incorporating elements such as global distribution system (GDS) fees, IATA agency commissions, electronic ticket agreements, and associated charges.
Codeshare Agreements
The 1960s witnessed the birth of another significant form of airline cooperation – the codeshare agreement. This novel strategy debuted in the United States when Allegheny Airlines, later rebranded as USAir, collaborated with a commuter airline. As the regulations on domestic air travel in the US relaxed during the 1970s, codeshare agreements started to become commonplace.
Codeshare agreements are essentially a form of symbiotic marketing. They enable airlines to advertise seats on a partner airline’s flight as though they were their own, expanding their reach significantly. Although airline alliances like Star Alliance, OneWorld, or SkyTeam commonly utilize these agreements, they also partner with airlines outside of their alliances. This strategy allows airlines to offer a broader range of services to their customers, optimizing their load factor, and creating a win-win situation.
Qantas and American Airlines were the pioneers in officially using the term ‘codeshare agreement’ in 1989. Their joint venture offered a hub-and-spoke-style service, leveraging their home bases at airports in Los Angeles, Sydney, and Melbourne. The deregulation in the European Union during the 1990s further spurred the popularity of codeshare agreements.
Virtual Interlining
In recent years, the emergence of Virtual Interlining has disrupted traditional airline practices. Companies like Kiwi.com and Dohop introduced this innovative model in the early 2010s. Unlike previous agreements that relied on formal collaborations, Virtual Interlining utilizes sophisticated technology solutions and entrepreneurial thinking.
Initially, these companies purchased single-flight segments from booking systems like Sabre and Amadeus. They then combined these into detailed travel itineraries, offering additional services such as hotel costs reimbursement for missed connections and alternative flight vouchers. This innovation also included supportive services like phone helpline support.
Inspired by this forward-thinking approach, some airlines began exploring the potential of Virtual Interlining themselves. For instance, in 2017, the “Worldwide by easyJet” initiative, enabled by Dohop, signaled a major shift in the industry. This marked the first time airlines actively integrated Virtual Interlining into their business models.
Consider also the airasia Superapp, a platform that even allows users to secure reservations for long-haul international flights with various airlines.
Virtual Interlining ties together individual flights, creating a network of connections previously unachievable with traditional interline or codeshare agreements. However, it comes with its unique challenges. Since these flights operate independently, passengers need to handle their luggage at each connection. Additionally, without formal airline collaborations, travelers cannot access the customs-free transit areas usually available for traditional connecting flights.
Despite these hurdles, the advantages of Virtual Interlining are clear, particularly within visa-free areas like the United States and Canada or Europe’s Schengen area. Here, streamlined immigration procedures make this innovative approach an attractive option.
In the end, interline agreements, codeshare agreements, and virtual interlining have all played essential roles in shaping the current landscape of air travel. Each of these agreements has contributed to making air travel a more connected, flexible, and customer-centric industry. They have enabled airlines to build bridges across the globe, ensuring passengers enjoy a seamless journey, no matter their destination.
First love never dies. I fell in love with airplanes and aviation when I was a kid. My dream was to become a pilot, but destiny led me to another path: to be an aviation digital media content creator and a small business owner. My passion for aviation inspires me to bring you quality content through my website and social accounts. Aviation is indeed in my blood and blog!
