Recently I have signed up interline agreement with a local airline I fly to, to generate some more passenger ex-my hub.
However, my interline partner then open up a new route to my hub, forming competition with my route. Then, the pax load from his hub to my hub has dropped more than 50%. I checked my rating is half of his in ORS because of my high price and not so good product.
We obviously need the interline because he will fill his plane on to my routes as well. Is the only way to deal with this competition is to lower the price? I obviously wont want to change my seat configuration because other routes are doing perfectly well.
Your options are really to either send them a message and co-operate properly, lower your price, or improve your product.
I would say that if you are on a new game world, and have been charging high prices with a bad product you will eventually need to change this anyway as competition builds.
When he’s filling this flight because of the interline agreement, then he’s adding pax (revenue) to your network. I’d hardly call this competition.
The question always is: is an IL-agreement worth it? Often it is not, IMO.
Doesn’t this happen a lot with IL partners in the same country?
It just seems like this is inevitable when two airlines are in the same country, unless there is some sort of very specific agreement in place between them.
I am not at the same country as I found a market in Central Asia.
My flight is in competition with his flight because before his entry, I am at 100% PLF, I did interline because I am adding a 2nd daily flight to his hub. However, he introduce a flight to my hub, causing my inbound flight PLF dropped immensely. My outbound flight is completely full, so I dont want to change my product.
Yes, I am exploiting a bit in the new world, so it seems the only viable option will be to lower the price.