Let’s say your HUB is airport A and you operate international flights. Another airline operates domestic flights only, also having A as its HUB. Would it be profitable for the two airlines to establish an IL agreement?
Yes as long as there is no competition then it would be beneficial. But then you have to ask how long airline a will keep going with just intl,
And b just domestic…
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Short answer is Yes it would be profitable....You will see that many players have more the one subsidiary/Airline in a HUB handling different distances and IL between the subsidiaries to handle each other incoming and outgoing PAX. No diffrence in the scenario that you are describing. Where is gets complicated is when you start moving into SH routes and he into LH routes J
Dan
Not encouraged as the other airline may seek for further growth by expanding international market. When it happens, probably an agreement would end.
Thank you for your answers! I'll reconsider.. maybe talk to the other owner too..
In my opinion, it can work well; you just need to pay attention to what your ILs are doing. I am following that strategy as we speak.
I think everyone would like to grow stronger and bigger instead of being the small part. So, build a strong hub (can be either domestic or international) and go ahead interlining with other airlines in other regions. Dependent on each other means that you have to tolerate and cooperate with each other all the time. When there is one feeling the competition happens, probably they will end up with terminating the agreement and lots of redundant staff.
Sometimes, when researching the other airlines at one's own hub, it becomes apparent that their business plan or strategy is different enough that the risk of interfering with each other will be lower. In my case, for example, my hub is where flights from relatively widely-separated regions meet and exchange passengers. It is in the US but my goal is not to connect US cities as part of a national network. For the most part, I feel comfortable interlining with other US airlines at my hub that appear to be doing something different from what I am doing.