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American, Delta Refuse to Cooperate on Stranded Flyers

Despite the veneer of fierce competition, airlines function within an industry ecosystem that thrives on cooperation. Airlines pass bags back and forth when passengers make connections between different carriers. They accept each other’s tickets. And when one airline cancels a flight, there are normally agreements in place that allow that carrier to transfer affected passengers to another airline, at a pre-negotiated rate.

All of these bilateral linkages fall under a master contract, known as an interline agreement. Interline agreements are good for the airlines, inasmuch as they help keep sales and operations working smoothly; and they’re good for travelers, who benefit from more or less seamless connections when a trip requires flying on more than one airline, and when an otherwise single-airline trip is disrupted.

Despite the pervasiveness of these links, and their importance to both the airlines and the traveling public, tomorrow, the country’s two biggest airlines, American and Delta, will allow their interline agreement to lapse.

What happened? Here’s Delta’s version of events:

Thanks to employees’ stellar operational performance, Delta customers enjoy an industry-leading experience. Unfortunately, we couldn’t reach an agreement with American that adequately addressed the number of IROPs (irregular operations) customers that American transferred to us. In July, for example, American sent passengers to Delta for reaccommodation at a five-to-one ratio. At that rate the industry agreement was no longer mutually beneficial.

In other words, American was passing far more stranded passengers to Delta than Delta was passing to American. Delta felt that was grounds for upping the rate to reaccommodate American passengers, and American refused to pay the higher rate.

This could all be dismissed as inside baseball, except that the two airlines’ disconnect will ultimately affect travelers, and the effect will be most pronounced just when flyers are at their most vulnerable, when their flights are canceled.

Both airlines have interline agreements with other airlines, to be sure. But with flights running more than 80 percent full, it’s harder than ever to rebook stranded passengers on other airlines. And for American and Delta flyers, it’s about to get harder still.

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