Why Delta Thinks They’re Too Good to Have an Interline Agreement With American

Seventeen years ago I used to credit Delta flights to United Mileage Plus. You could do that back then, although it was a pain because the miles almost never automatically posted.

The SkyMiles-Mileage Plus relationship is long gone (so is the ‘space’ between Mileage and Plus) and so are the contours of many of the relationships in the airline industry. Sometimes they come back around, British Airways and US Airways were original partners and now with the American merger US Airways is back in a joint venture with BA.

Still I was surprised that American and Delta will no longer have an interline agreement starting Tuesday. That’s the most basic agreement, and major airlines almost always have those with each other.

That means neither airline will sell tickets on the other. And they won’t transfer baggage to each other, either.

Neither of those is a particularly big deal. Neither airline would interline bags to each other on separate tickets already.

The biggest issue is that neither carrier will accept the other’s passengers during irregular operations (mechanical issues, weather, crew availability, etc) at the standard discounted industry rate. In other for American to put a passenger on Delta when a flight is cancelled, they’d have to pay Delta the walk up fare for the seat (and vice versa).

We now know why the American-Delta interline agreement will end. Delta wanted more money than the standard industry agreement. And Delta is irrops-shaming American over it.

“Unfortunately, we couldn’t reach an agreement with American that adequately addressed the number of IROPs customers that American transferred to us,” Eric Phillips, Delta’s SVP – Revenue Management, says in a statement. “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.”

Apparently American did negotiate directly with Delta on this, but wouldn’t pay as much of a premium as Delta wanted. Which tells me, more or less, that Delta didn’t want a deal.

Delta set a number of operational reliability records this summer.

I wrote a few weeks ago that Delta:

  • cancelled just 0.21% of its flights this summer.
  • had 21 days without a single cancelled mainline flight.
  • had 45 days this summer without any maintenance cancellations.

And they’re pretty arrogant about it, too. Other airlines need Delta, Delta doesn’t need other airlines. That was the message to Korean when Delta eliminated elite qualifying mileage earning on Korean Air two years ago. Thinking at the time was that Delta was trying to pressure Korean into an immunized joint venture across the Pacific.

It’s true that Delta needs to put fewer passengers on American than American needs to put on Delta. I wonder how those Delta passengers who did need to get put onto American when something went wrong with a Delta flight will feel knowing Delta didn’t think they mattered enough, because there aren’t as many of them on Delta as there are on American. So their airline wouldn’t renew a standard agreement — even at above the standard amount.

About Gary Leff

Gary Leff is one of the foremost experts in the field of miles, points, and frequent business travel - a topic he has covered since 2002. Co-founder of frequent flyer community InsideFlyer.com, emcee of the Freddie Awards, and named one of the "World's Top Travel Experts" by Conde' Nast Traveler (2010-Present) Gary has been a guest on most major news media, profiled in several top print publications, and published broadly on the topic of consumer loyalty. More About Gary »

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Comments

  1. You’re letting your hate for SkyMiles (justified) color too much of your commentary on Delta. Why should Delta pay for American IRROPS when they have a better run operation?

  2. As you touch on in the article, what goes around comes around, this will change back at some point, say after another merger or period of incidences or major incident which require cooperation.

  3. At some point you have to wonder what happens to Delta if it ever falls on hard times with them seemingly pissing off anyone they can….This is the airline industry afterall and even though things are great now, its a matter of time before they aren’t.

  4. Gary – So does this mean we’ll only see AA put some passengers on Delta (maybe elites only)? None at all? Still just as many, it’ll just cost AA more? Thoughts?

  5. Great – now we have a DYKWIA airline that thinks it is above the rest! Delta’s pride may cometh before its fall.

  6. While I’m sure your points (pardon the pun) are valid. I think this goes beyond all that at a personal level. I think Delta is mad over the whole Seattle – Tokyo route issue. I also think Delta is upset at how chummy AA is getting with Alaska Airlines lately.

  7. Delta is really full of themselves. It really doesn’t matter what the ratio is, these IRROPS passengers, like award travelers, are incremental. They are flying in seats that would otherwise go out empty, so no matter what they get, it is additional revenue for them. Delta is not bumping their own passengers to make room for AA passengers.
    It does make me wonder what has gone on with UA in this regard. Have they capitulated and are paying Delta extra or has that negotiation not started or is Delta just pissed at AA over something, so aren’t asking United for more. Maybe they are trying to damage their nearest competitor and not worried about United?

  8. Unless I’m missing something, delta can still put passengers on AA flights during irrops but would just have to pay a higher rate right? 5:1 ratio is not nothing… It works for their bottom line and they still have have interline agreements with other airlines – what’s not to like from deltas perspective. It’s not the friendliest thing to do to AA but they are running a business…

  9. @Andrew – you misunderstood. The end of an interline agreement between both airlines means that they will no longer be able to put their passengers on each other. At all.

  10. No, DL can not put passengers on AA without an interline agreement. The passenger would have to go to Delta directly and purchase a ticket. Luggage would also have to be reclaimed and checked in with the other carrier directly with additional baggage fees duly paid. This would make it nearly impossible–unless there is a very long layover–to take a connecting flight between the two carriers with bags. Thus if a passenger were travelling from SFO-JFK-Europe on DL and DL cancels the SFO-JFK flight, they could not put the passenger on AA to JFK and keep the DL flight from there anymore. If the passenger wanted to still connect in JFK, since UA will be pulling out of that market and DL does not interline with VX and B6, the passenger would simply have to wait until DL could find a seat through another hub or wait several hours/days to get a connection through JFK on DL.

    UA has also issued a memo to employees to make DL the carrier of last resort to use to protect its passengers.

    DL will save money by simply giving refunds to passengers that can’t wait a few days to be protected on another DL flight with seats available. They also seem to be hoping that by making it more likely that an AA passenger may be stranded when DL has empty seats on their flight that somehow makes DL look better. I doubt if a passenger that paid $200RT for a ticket who is offered a $1000 ow on Delta as a walk up fare that the passenger will be singing DL’s praises.

  11. Delta and American technically could follow IATA revenue accounting manual 2.6.1 and issue a FIM (flight interruption manifest) providing the other carrier the full one way fare rather than accepting the original flight coupon (2.5.1) calculated either in accordance with the Multilateral Proration Agreement (which Delta disavowed) or a bilateral agreement (which American and Delta couldn’t come to agreement on).

    In practice this isn’t something that either carrier is going to do in except the most extreme circumstances.

  12. You make a big deal of this… but this about it this way. Southwest, Spirit, Allegiant , and Frontier don’t interline, yet they compete with them. Internationally, Delta still interlines with lots of other airlines, so most of their international network is covered by reasonable agreements. For domestic, they still have a huge network which is essentially Delta and Northwest’s network. They can also interline you on United, which is both United and Continental’s network, and they likely interline with Alaska, Hawaiian too. They run an amazing airline, so they very rarely need to interline customers on American.
    You just sound really mad about SkyMiles. You need to get over it!

  13. Delta sounds reasonable here. I see more low airfares and deals on delta now that they no longer give oodles of miles (liability)

    So it would be reasonable to credit Amex airline fee credits to delta? If you are a paying customer probably better to fly delta. Yes?

  14. Gary, what’s the deal? How many Skypesos did you lose in delta devaluation? Or is your indignantion purely based on principles?

  15. Luckily my hate proudly runs so strong for Delta I don’t care
    Yes I flew them for a few years I am embarrassed to say many years ago
    Id be happy to take Virgin America United Southwest, Jet blue Alaska even gasp spirit
    Really who wants to fly Delta in their right mind?
    25 year old aircraft and the worst ff program in history when trying to fly their own metal
    I am grateful to every passenger that does choose to fly them and get them off my preferred carriers of choice It would be about my last choice unless the world was coming to an end and it was the last way out
    Like Bank of America they score at the bottom of the public respect and trust according to polls

  16. This post is silly. It’s business. If American has a problem, they should pay the premium or not need to rely on Delta five times as much as Delta relies on American. Pretty simple.

  17. @ Gary — Whoa, so this actually means that DL and AA will generally not reaccomodate you on the other during IRROPs? If so, it is time for Congress to step in. This is a 100% unacceptable outcome for passengers. If you want to operate an airline in the US, you cannot disgerard passengers’ needs.

  18. Years ago a friend of mine lived in a school district that routinely passed its school bonds and levies and had very good schools. However, just a short distance away was another district where bonds and levies never passed. The schools were run down, facilities were lacking and there were few extras outside of the three R’s. Taxes in this run down school district were, of course, lower.

    Parents in the bad district had gotten into the habit of voting down the bonds and levies, thus keeping their taxes lower, while at the same time, enrolling their children in the better district that passed bonds and had higher taxes.

    Eventually, the people in the better district wised up and started to demand extra payments for students in other districts who enrolled in the their good schools.

    So, what is the big Deal with Delta? Like the district with the more generous taxpayers, they are tired of footing the bill for the cheapskates in other places.

    What in the world is wrong with that?

    The real problem is American’s percentage of problem flights, not Delta wanting some fairness.

  19. Gary great catch. Nobody (well I guess somebody) would have know about this change if you had not written about it.

    Delta has been leading beggar-thy-neighbor policies toward their partners, elite flyers, bank frequent flyer mile purchasers, and customers for a long time. Hopefully, United will stop following their lead now that the golden parachute guy, Smisek is gone.

    It is my belief that in the long run, customer hurting policies have a price.

  20. @gary i thought FIM’s were also used when a paper flight coupon wasn’t available and there was no way of pushing over a ticket to the new carrier… have they always meant that full fare was being paid for the new seat?

  21. It’s Delta who will lose here. They overplayed their hand and will lose out on the revenue on what would have been unsold seats. United is the winner.

  22. Before you go jumping on a band wagon and feeding into someone opinions and biases, you should do your own research. When someone is going to post a quote ask them to post the entire quote or tell you the source so u may read it on your own to fomulate ur own opinion.
    Have you ever heard of industry standards and the airline governing body IATA. Look it up. When u bring this crap bring it to someone who don’t know better.
    Why should an airline continue to take another’s passengers during IROPS, that’s the correct terminology, when the other can never seem to have space to reciprocate? So AA passengers can always rely on Delta during an IROPS but Delta’s can’t ever get a seat on an AA flight. How’s that for industry standard or fair for that matter?
    Don’t be followers and be led blindly by folks with an agenda and biases. Do your research.

  23. @Rashole1 – who says Delta “can’t ever get a seat on an AA flight” Delta’s point is they don’t need the seats on AA as often as AA needs the seats on Delta.

    There is a very long tradition in the airline industry of accepting distressed passengers from other carriers on a reciprocal basis, which is why there are industry standard agreements.

    Delta certainly has the right not to do so.

  24. Ask the author of this piece for the rest of the quote. That 5:1 isn’t taking about the number time Delta needed AA but the number of times they could actually get their passengers accommodated.

  25. @Rashole1 – you are 100% mistaken. And I do link to the source. Delta runs an on time operation that cancels very few flights. They haven’t needed to put passengers on American, hence the imbalance.

  26. This is what you get when competition is reduced… I consider this type of agreement basic insurance for passengers to not get stranded and it’s a sad state of affairs! And even if UA still has an agreement, I bet the higher prices will make it less likely that we will get a DL seat and more likely that we have to wait longer to save a few bucks….
    One more reason you avoid US carriers for international flights where you do have a real choice!

  27. @Flyer Fun: Are you serious? This has been posted on numerous blogs on Boarding Area and elsewhere; on FlyerTalk; in the news.

    Since UA was able to come to agreement, and presumably wouldn’t be signing up to unfair prices, seems like AA is being cheap here. I can’t blame Delta.

  28. Firstly – if separate tickets are issued for two airlines – baggage cannot be transferred no matter if there is an interline baggage agreement.

    Secondly – DL basically didn’t want to continue the Interline Ticketing/Baggage Agreement with AA because during Irregular OPS, AA put 5x more passengers on Delta, than Delta did on AA. If there is an Interline Ticketing Agreement – each carrier accepts the discounted fare. If there is not an Interline Ticketing Agreement – each carrier pays the other airline the full fare and this does require a FIM. Despite AA’s efforts for improve their on-time performance by changing an endless numbers of AA policies to US Airways policies; it hasn’t happen and I personally do not believe it will. AA didn’t previously become the On-Time Machine or #1 in Customer Service by adopting policies that don’t work (from a smaller airline to one of the Big Three).

  29. Next time you’re stranded on DL (and, yes, they DO still have irrops) and they’re having trouble accommodating you on a flight… on anybody’s flight… because now AA isn’t a viable option.. You’ll know what the issue is.
    This is just another example of what a sad industry this is.

  30. @Kathleen – I have checked bags through on separate tickets literally dozens of times, it is just that both delta and american now have policies against (as I observed).

  31. @Gary
    I thought there is a difference between interline and accommodating during IRROPS
    I thought interline means buying a ticket that includes both carriers and send luggage through, but on which scenario would that happens between DL and AA and vice versa?
    On the other hand during IRROPS, can’t one carrier just pay “walk up” fare to the other airline, just like you would pay walk up fare at the air[port?
    tks

  32. This event reminds me of the 2 times that my company had issues with NW and severed our interline agreement. It was a big deal. The founder of my company ordered everyone to not use NW at all. So, far as asking employees to not use NW for personal travel as well. Happened once in the 80s and once in the 90s. Less than a year later, both times, new agreements were signed. AA will experience not having the ability to use DL, DL will miss that extra revenue, and suddenly they will renegotiate. Voila! DL and AA are back together again. Give this time. A bad winter will make each other suffer enough to renegotiate. Years back, when there were many more airlines, pulling this stunt, was not as harmful as it will be today. Oh, and Delta crowing about how great their operation has been running this summer….yeah, a summer with generally good weather. Delta had better be praying to the weather gods, because Delta has 3 or more hubs that are very vulnerable to bad weather!

  33. There are still airlines, like Alaska, that can issue tickets on American and Delta. Can Alaska now issue a ticket with both American and Delta segments? And with the loss of interline, how will the bags be transferred?

  34. I cannot figure out whether the Trolls are real Trolls (people that just like to stir up things, sort like how arsonists like to start fires), or paid Trolls (people paid by Delta directly or indirectly to defend Delta whenever someone criticizes Delta). I suspect the latter.

    It really does not matter. With regard to the frequent flyer program, Delta has been pursuing a beggar thy customer strategy for a long time. That is why I do not fly Delta if I have a choice.

  35. Effective October 1, 2014, AA will no longer through check bags when the passenger presents separate tickets at the ticket counter except as noted below.

    …Customers traveling on separate tickets will only be able to through check bags when the ticket is for travel on:

    American Airlines and American Eagle
    US Airways and US Express
    oneworld partner airline

  36. AlohaDaveKennedy was prescient in his statement above about pride coming before a fall – DL’s operation is in shambles for the last 3 days and thousands of passengers (myself included) are having to deal with the fallout.

  37. I wonder if there are any regrets about this move now? AA has gotten their operation together (not quite as good as Delta, but much stronger) while DL has had to suffer through three major meltdowns with only UA and AS as interline partners, and AS will end next month.

    DL execs could take a hint from TLC at this point, “Ain’t too proud to beg.”

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