The path to success for many niche and regional airlines is the development of strong relationships with large network carriers with worldwide reach. For airlines large and small, these relationships typically touch many areas of the company. The Embark team has successfully executed several partnerships for client airlines and major airlines, including Air Canada, American, Delta, JetBlue, and United.
There are several types of partnerships with varying levels of complexity. These include:
- Interline Ticketing and Baggage Handling Agreements
- Seat Blocks
- Alliance Codeshare
- Express Codeshare
- Special Prorate Agreements
There are five key areas that have to be evaluated for an effective Alliance, these include:
Commercial: Network, Pricing, and Inventory
In order to interest a major carrier in a partnership, you must demonstrate the commercial value or strategic relevance of a partnership. The regional carrier often has to help define the value it can provide to the large carrier, in terms of network growth, incremental revenue, and unique customer bases. The potential partner likely has dozens of partner opportunities at any given time, and each potential partner has an implementation cost. Therefore, being able to clearly define the commercial value and concept is critical to recruiting partnerships.
Regulatory and Legal
Once you have the interest of a major carrier, you have to negotiate terms and ensure the potential partnership meets legal and regulatory requirements. This in especially important when dealing with international routings.
In order for any airline partnership to be effective, the related information technology systems, primarily Airline Reservations Systems, Global Distribution Systems, and Online Travel Agent systems must function flawlessly. All activities must be highly coordinated between partners, including day-to-day activities like schedule change and inventory management as well as large periodic projects such as system upgrades. Strong processes and redundancies must be put in place to ensure the commercial goals are met.
Operations, Safety, and Security
The major network carriers have very high expectations in terms of operational performance. Regional carriers must demonstrate its safety and security procedures to the satisfaction of the major airline. The major will also expect strong on-time performance and completion factor on par with its other partners. Further, they expect the regional carrier to deliver a passenger experience similar to their own – on the ground and in the air. Therefore, you must be able to demonstrate a strong operational performance and excellent customer experience – and be able to react to situations where everything does not go as planned.
In the end, the purpose of the partnership is for each partner to increase incremental revenue. Revenue Accounting is the final step to receive that benefit. Revenue Accounting must be able to settle each and every ticket correctly through the industry clearinghouses. Proper management of this process ensures each carrier receives what it is owed in an efficient manner without delay or problem.