Here at Simple Flying, we often write about new agreements between airlines. From codeshares to joint ventures to interline agreements… there’s a whole lot of collaboration going on between carriers. But what exactly are interline agreements, and how do they differ from other sorts of partnerships?
What is an interline agreement?
When two airlines enter into an interline agreement, it’s the most basic form of partnership you will find. In essence, it allows passengers to book through itineraries on multiple airlines with less hassle than booking each one separately.
Usually, if two airlines have an interline agreement in place, they will handle the check in and baggage for each other’s passengers. That means travelers only have to check in once for all the flights on the itinerary, and that their baggage will be transferred by the first airline to the second airline, without them having to manually collect it and drop it off again.
For the airlines involved, this sort of agreement can attract more passengers by providing easy connectivity to destinations not served by the original airline. Emirates recently signed an interline agreement with Mexico’s Interjet, which will allow passengers on its new Mexico City flights to continue on to other destinations without having to recheck themselves or their luggage.
The downside of an interline agreement is that passengers can’t collect frequent flier miles for the whole trip. On the Emirates flight, for example, Skywards miles would only be earned on the Dubai-Mexico City portion of the flight, not on the onward journey.
There can also be variances in things like luggage allowances for carry on, and there is no coordination on timings for flights, so it’s not always the easiest method of getting a right through booking.
Other partnerships: Codeshares
Deeper partnerships see more sharing, more collaboration and more strategic action between the airlines involved. These include codeshares and joint ventures.
A codeshare is viewed as the next step up from interlining, and sees airlines working together by placing their ‘codes’ on each other’s flights. What’s that code? Well, it depends on the airline. IATA issues the codes to all its member airlines, and this is what’s displayed on the flight number of each service.
For example, easyJet’s IATA code is U2. If it was to ‘codeshare’ with Ryanair (like that would ever happen) then some Ryanair flights would have a flight number starting U2, rather than FR. The reason for this is that it helps drum up business for each of the airlines when their own networks don’t penetrate any further.
As an example, one of the most recently announced codeshares is between Lufthansa and Vistara. Lufthansa flies to Delhi, but has no onward network within India. With this codeshare, passengers can book right through from any of Lufthansa’s destinations to a number of new cities in India, including Ahmedabad, Bengaluru, Goa, Hyderabad, Kochi and Pune. This is an evolution of a previous interline agreement between the two airlines that signifies a deeper relationship.
Other partnerships: Joint ventures
The next step forward again is a full joint venture. When airlines enter into a joint venture, they pretty much become one big airline, cooperating on everything from scheduling to pricing, and share the revenue between them too. Details of how this type of agreement works are down to the airlines involved.
Joint ventures signify such a close cooperation, they are almost as good as a merger. The main difference is that they operate usually in separate geographic areas. For example, Delta and Virgin Atlantic have had a joint venture in place for some time, which allows for a massive transatlantic presence as well as an extensive network in Europe and America. Recently, Air France-KLM has been added to this partnership, further solidifying the participants’ firm footing in the transatlantic market.
With all these partnerships, the exact details will vary depending on the agreement that is put in place. Hopefully, this gives a useful overview to demystify some of the partnership terminology frequently used by airlines around the world.