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Delta joint venture conditional DOT approval

Delta joint venture conditional DOT approval

Old Oct 23, 20, 4:27 pm
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Delta joint venture conditional DOT approval

https://www.reuters.com/article/us-d...source=twitter

Excellent development! The U.S. Transportation Department said on Friday it had tentatively approved a proposed alliance agreement between Delta Air Lines DAL.Nand Canada's WestJet that is expected to expand travel options between the United States and Canada.

The department said it would require the carriers remove Swoop, an ultra low-cost carrier affiliate of WestJet, from the alliance, and divest 16 takeoff and landing slots at New York’s LaGuardia Airport.
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Old Oct 23, 20, 5:47 pm
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Originally Posted by cirrusdragoon View Post
https://www.reuters.com/article/us-d...source=twitter

Excellent development! The U.S. Transportation Department said on Friday it had tentatively approved a proposed alliance agreement between Delta Air Lines DAL.Nand Canada's WestJet that is expected to expand travel options between the United States and Canada.

The department said it would require the carriers remove Swoop, an ultra low-cost carrier affiliate of WestJet, from the alliance, and divest 16 takeoff and landing slots at New York’s LaGuardia Airport.
Also interesting in the decision that requires WestJet to provide interline capacity to any US airline at rates no worse than IATA prorate rates. That looks to have been an ask from Alaska. This probably puts WestJet as the go-to connecting airline for all US carriers other than United.
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Old Oct 23, 20, 8:35 pm
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This is a non-starter until Canada removes the 14-day quarantine. DL is down from 25 daily YYZ flights to ATL, DTW, JFK, MSP, CVG and SLC to now only 2 daily flights to DTW.
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Old Oct 23, 20, 10:41 pm
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Originally Posted by sydneyracquelle View Post
This is a non-starter until Canada removes the 14-day quarantine. DL is down from 25 daily YYZ flights to ATL, DTW, JFK, MSP, CVG and SLC to now only 2 daily flights to DTW.
This is going to be a great foundation for once the recovery of the airline sector begins someday.
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Old Oct 24, 20, 7:30 am
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Originally Posted by Fiordland View Post
Also interesting in the decision that requires WestJet to provide interline capacity to any US airline at rates no worse than IATA prorate rates. That looks to have been an ask from Alaska. This probably puts WestJet as the go-to connecting airline for all US carriers other than United.
What is the difference between an interline and a codeshare?

Originally Posted by cirrusdragoon View Post
The department said it would require the carriers divest 16 takeoff and landing slots at New York’s LaGuardia Airport.
Does this mean that WS would have to pull out of LGA altogether?
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Old Oct 24, 20, 8:31 am
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Originally Posted by YYCguy View Post
What is the difference between an interline and a codeshare?



Does this mean that WS would have to pull out of LGA altogether?
Interline agreements occur when two airlines agree to allow connecting flights between them to be placed on the same ticket. That can be with one airline on the outbound and the other on the return or, more importantly where a connection is made en route from one to the other.

This allows the passenger to travel on one through ticket and have protection against any delays or cancellation to one of the flights, as well as having their baggage checked all the way to their final destination.

Strictly speaking a separate "baggage interline" agreement is required for through checking of baggage, but it's unheard of for a passenger interline agreement not to go hand in hand with one for checked bags.


With an interline agreement, the airlines determine which fares can be offered for these itineraries, which flights are covered, which of the two airlines (or both) can issue the tickets, and arrange a billing and settlement plan. When an “interline” ticket is purchased, one of the two airlines will issue the ticket and collect all the money (fare and government taxes) from the passenger. That airline is known as the ticketing or in airline speak the “plating carrier”, and the ticket is issued with the ticketing carrier's ticket code; the first three digits on the ticket number identifies the ticketing carrier (e.g. a ticket issued by Delta will have the first three digits 006). When the other airline completes each flight it invoices the ticketing carrier for its part of the airfare and the government taxes it has pay.

One thing to make clear, airlines do not need to be codeshare partners or alliance partners in order to have interline agreement. Many fierce competitors have interline agreements (e.g. British Airways and Virgin Atlantic, and most other global carriers have agreements between each other). It’s actually the other way round; for all practical purposes codeshares require interline agreements and alliance members need to have interline agreements with each other. With codeshares, the fact that you get protection against missed connections and your baggage checked through is a function of the interline agreement.

Code shares are essentially joint marketing agreements between airlines that allow one airline to place its own flight code on flights operated (flown) by another airline, and sell tickets as if those flights were their own.

There are actually two types of code share. The first (and most people hardly notice these) is regional contract flying. That’s where the airline operating the flight is doing so under contract for a major carrier and doesn’t sell any tickets of its own. Example where the major carriers contract out flights and market them using the brands Air Canada Express , American Eagle, Delta Connection and United Express. in all cases these flights are treated as if they’re the marketing carrier's’ own flights and you’ll always check in with the marketing carrier and their baggage and carry on rules apply.

It’s the second type of code share that gets the most attention. That’s where major airlines put their codes on other major airlines’ flights, for example you buy a ticket from American with an AA flight code and then discover you’re actually on a British Airways flight.


Code share partners do not have to be in the same alliance, and there are many examples of airlines from competing alliances code sharing, e.g. Air New Zealand (Star) and Cathay Pacific (Oneworld), or United (Star) and Aer Lingus (unaffiliated). For all practical purposes code share partners must have an interline agreement in place, as it’s the interline agreement that enables the flights to be on one ticket and for baggage to be through checked.

The benefits of code shares to frequent fliers is that they do get miles and elite qualification points on code shares operated by another carrier (although many already have mileage programs in place). It's also a means - though not the only one - of getting flights from different airlines booked onto the same ticket, and sometimes the only way of doing so using an airline's website. For airlines, one large benefit is that more of their flights appear at the top of search engines, especially what would otherwise be multi-carrier tickets.



As for Westjet/Delta and LGA,
the joint venture can be treated as a combined entity with a combined slot pool. It really doesn’t matter who is officially giving up the slots.

Having to give up 16 slots isn’t that surprising and was probably expected by Delta/Westjet. Westjet got their current 16 LGA slots as a result of slot divestitures Delta had to make as part of the Delta /US Airways LGA/DCA slot swap. It was always highly unlikely that the DOT would essentially undo that divestiture and allow Delta to have de facto control over the slots again.



Basically, the number of slots equal to the Westjet LGA operation prior to the JV will be given up from the collective pool of slots of the two carriers. The Delta/Westjet operation at LGA will be equal to the Delta operations alone prior to the JV.



Who operates the slots is irrelevant to regulators. Now its a matter of which slot timings they choose , should Delta and Westjet agree to this tentative approval.

Last edited by cirrusdragoon; Oct 24, 20 at 8:45 am
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Old Oct 24, 20, 8:57 am
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How is that excellent news?

It means that competition has been eliminated, and passengers will have fewer options to choose from.

This should ultimately result in higher prices.
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Old Oct 24, 20, 9:07 am
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Cirrusdragoon, that was an excellent explanation and I am most appreciative! Thank you! 👍
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Old Oct 24, 20, 9:08 am
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Originally Posted by smartytravel View Post
How is that excellent news?

It means that competition has been eliminated, and passengers will have fewer options to choose from.

This should ultimately result in higher prices.
There should be some positive side effects. There is no guarantee in that the government will not force this but it is the logical outcome that the WS loyalty program will evolve to become more like the Delta program. Hopefully reciprocal lounge access, upgrade list access for the other guys flights etc. Better timed connections through Delta and WestJet hubs.
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Old Oct 24, 20, 9:10 am
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Originally Posted by smartytravel View Post
How is that excellent news?

It means that competition has been eliminated, and passengers will have fewer options to choose from.

This should ultimately result in higher prices.
From a competitive strategic point of view, quite the contrary. By reducing the economic risk of adding new routes, or by making new routes possible in the first place, the airlines involved in joint ventures create value for all aviation stakeholders, including the end customer. As beauty is to the eye of the beholder , so too is a joint venture to the eye of the certain consumer.

All Nippon Airways has noted the success of its agreement with United Airlines, for example. Thanks to increased convenience, passengers connecting on flights between ANA and their JV partners have more than doubled in the past decade alone .

Similarly, the JV between American Airlines, British Airways and Iberia allowed the partners to begin services on a number of US-Europe city pairs, including London to San Diego, which could never have been profitably served by BA alone. The increased access to feeder routes and connecting traffic provided by the JV partners made it possible.

Metal-neutral JVs, with complete indifference over which flight passengers take, form the backbone of these benefits. They enable the partners to coordinate schedules and flight times, provide the right capacity at peak times, and spread departures more evenly throughout the day. Arrival and departure times can also be managed by the allied airlines to improve connectivity.

In fact, evidence suggests closer forms of airline cooperation lead to fare reductions, with IATA reporting in an economics briefing on JVs that interline passengers may benefit from fares 27% lower under immunized alliance partners compared with an interline fare between non-aligned airlines.

The evidence from many studies in recent years points to the benefits for consumers that can be generated by the closer cooperation of airlines in an Open Skies environment, producing a more efficient and convenient combination of services on their joint networks.

The softer side of the JV business model also has its advantages. JVs should entail a quality passenger experience through such areas as airport lounges, gate location for connecting services, onboard amenities and service quality, baggage policies and problem resolution, frequent-flyer plans, and refunds and exchanges. As these aspects are integrated and jointly managed, the customer receives a correspondingly simplified and consistent service.
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Last edited by cirrusdragoon; Oct 24, 20 at 9:29 am
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Old Oct 24, 20, 9:20 am
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Originally Posted by smartytravel View Post
How is that excellent news?

It means that competition has been eliminated, and passengers will have fewer options to choose from.

This should ultimately result in higher prices.
Good news because there will be more choice for consumers, not higher prices. WS/DL will have a better opportunity to compete with UA/AC. As part of the JV, the carriers promised to launch new routes, expand frequencies and covert seasonal routes to year round. Even before yesterday's approval, services like YYC-ATL and YYC-BOS would probably not be possible without the relationship that Delta and WestJet has built over the last number of years.
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Old Oct 24, 20, 9:43 am
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Originally Posted by YYCguy View Post
What is the difference between an interline and a codeshare?
cirussdragon gave a detailed overview of the difference. The one thing I would add interline has been around since the start of aviation and also occurs in other bus and train travel as well as cargo and courier services.

Interline agreements go back to the earliest days of aviation when the only way to get from A to B was by having direct competitors transfer passengers.

An older airline like Air Canada would have an interline agreement with nearly every major airline in the world.

WestJet is a new airline so it has fewer interline agreements but still substantially more than codeshare partners. For an interline to exist the two airlines need to figure out how to have their computer systems talk to each other, transfer money and baggage. United and WestJet have an interline agreement, that means WestJet could sell a ticket from Calgary to San Francisco connecting in Las Vegas with each segment listed under the operating airlines code/flight no.

Since WestJet and Delta are good buddies while United and Air Canada are good buddies you likely would never find the WestJet - United interline routing shown on the airlines website unless it was the only way to get from A-B. A travel agent can do it, the airline call center can also do such a booking. An online travel agency site could also do it. Also equality important a WS or United booking can be used to for passengers that need to be rebooked for some reason by airline staff.
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Old Oct 24, 20, 1:11 pm
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Originally Posted by On Time Reports View Post
Even before yesterday's approval, services like YYC-ATL and YYC-BOS would probably not be possible without the relationship that Delta and WestJet has built over the last number of years.
Hoping to see both those routes return at some point in the near to medium future!
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Old Oct 24, 20, 1:44 pm
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Originally Posted by Fiordland View Post
Also interesting in the decision that requires WestJet to provide interline capacity to any US airline at rates no worse than IATA prorate rates. That looks to have been an ask from Alaska. This probably puts WestJet as the go-to connecting airline for all US carriers other than United.
What benefit does this give which Alaska Airlines doesn't already have? I note that both Alaska Airlines and WestJet are part of the Global Explorer round-the-world product, so I would have thought that they already had an interline agreement.
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Old Oct 24, 20, 2:34 pm
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Originally Posted by Im a new user View Post
What benefit does this give which Alaska Airlines doesn't already have? I note that both Alaska Airlines and WestJet are part of the Global Explorer round-the-world product, so I would have thought that they already had an interline agreement.
I was under the impression perhaps ever since they walked away from the American Airlines relationship they stopped interlining with Alaska?
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