If an interlined airline liquidates, does it mean that all my passengers who were booked in a connection with that airline also have to be refunded by me? Or how are those passengers managed?
The bookings will remain. Even if interline partner goes bankrupt your flight bookings that already happened will not change (means you will not have to pay anything).
Once a pasenger has booked their flight, the system doesn’t keep recollection of what interlining flights that passenger is going through, each flight is counted as if different passengers had booked it (it would be too much of a strain on servers to process that information). So if one flight is cancelled/delayed/etc. it doesn’t affect the bookings for the other flights.
And what about the passengers booked on a route and the airline flying that route is liquidated. Do those passengers rebook other tickets or that is just wasted, lost demand.
Example: My competitor and I fly BOM-DEL with almost equal market share, but my aircrafts have unused capacity. When the competitor goes bankrupt, will his already booked passengers rebook onto me or just the new bookings, I will naturally have more loads…
They doesn’t get rebooked. They just don’t want to fly anyway. So they stay at home.