OP-ED: Network Carriers Must Look Beyond Legacy Interlining

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You’re the hard-working head of commercial for a long-established network airline. Like many during this time of lockdown, you’ve been having unusually intense dreams. Now you awake, perspiring, from a nightmare: You were in a meeting, trying to reach an agreement with someone who didn’t speak your language; every time you asked for something, they’d shake their heads and laugh.

Then you realize it’s no nightmare. It’s your new reality. Post-COVID-19, the network your airline built over years has been drastically cut, your alliance partners have retreated, and the only way your airline can maintain service to many points will be by cooperating with LCCs that were built on simplified business models that do not speak the language of “interline,” “prorate” and “through-check.”

Even before COVID, some airlines were starting to move away from alliances and toward tactical partnerships. And the consistent upward march of LCC market share means more and more traffic is carried by airlines that thrive on process simplicity and aren’t set up for legacy IATA interlining.

Of course, some passengers are engaging in DIY interlining, also known as “self-connecting” or “virtual interlining,” booking two or more separate tickets to get to their destination. The consultancy ICF estimated in 2019 that 70 million passengers, or 10% of all transfer passengers worldwide, were self-connecting.

Self-connecting brings benefits: a lower price and a greater choice of schedules by being able to mix-and-match flights from noncooperating airlines. Some online travel agents have specialized in selling these self-connecting itineraries directly to consumers.

However, self-connecting has historically had two main downsides. Passengers with checked baggage must collect their bags at the transfer airport, go through customs and immigration, check the bags for the second flight, and go back through security.

There’s also a risk being stranded, since it’s the traveler, not the airline, who takes on the missed-connection risk. Agents therefore often offer insurance or rebooking services for missed connections.

But many full-service carriers still grumble about virtual interlining. Less-savvy passengers may still assume it’s the carrier’s responsibility to rebook them for free in case of a missed connection. And airlines that have been seeking direct channels to market may balk at handing over to an intermediary the “ownership” of the passenger and at not being able to see more than “their” sector of the overall customer journey.

For these reasons, recent years have also seen the emergence of a more airline-centric “managed interline” technology solution that allows airlines to cross-sell flights and ancillaries even on non-interline and LCC partners, gives them visibility of “their” customer’s entire journey, and allows them to deliver customer service throughout that journey. Air Black Box, which pioneered this approach with the Value Alliance of LCCs in Asia, is about to launch a through-checked bag solution to eliminate the need to collect and recheck bags.

Some airports also see an opportunity to grow passenger numbers, and retain and attract airlines, by promoting themselves as self-connecting points. But the airport still has to get the message to the customer: The average passenger searching for cheap flights doesn’t look on connecting-airport websites.

Together, these various approaches will power an increasing share of air travel as these relatively new players build new “synthetic interline” products. In an increasingly LCC-influenced world, legacy interlining is more and more restricted in its scope; passengers are seeking out alternative routings for reasons of convenience or cost.

And what of the insomniac head of commercial? Well, hopefully there will be a realization that network carriers don’t have to lose out. These emerging forms of interline will let open-minded network airlines meet some new friends and spice up their relationships. That shouldn’t be the stuff of nightmares.

Patrick Edmond is managing director at Altair Advisory.
The views expressed here are his own