Airlines and passengers crave connectivity now more than ever. As the industry starts to recover post-pandemic, the scale and choice of flying options are no longer as vast as they used to be. This has led to more passengers traveling by self-connection.
However, when passengers create a self-connected itinerary on their own, the process can be fraught with uncertainty, volatility and financial risk.
The solution to the self-styled, self-connector is virtual interlining. By blending the trend of self-connection with digitization, airlines, technology providers and online travel agencies can access a valuable source of revenue and eliminate passenger headaches.
Connecting Flights: A Guide to Interline and Codeshare Agreements
Before you jump into virtual interlining, it’s important to understand the longstanding partnership frameworks for connecting flights – interlining and codeshare. Designed a decade ago and overseen by the International Air Transport Association (IATA), codeshare and interline agreements are both strategies used by airlines to collaborate and provide more extensive travel options to passengers, though they are distinct, level of integration, and how they facilitate the sharing of flights and services between multiple carriers.
The most fundamental partnership between airlines, interlining is a basic agreement where airlines agree to ensure that passengers whose itineraries include flights on more than one carrier have a streamlined, connected experience. This has several benefits for passengers, which ring true for virtual interlining as well; passengers need only a single ticket for several flights; they only need to check in once, at their start point; their baggage is carried from their point of origin to their final destination; and in the event of disruptions, travelers can be easily rebooked. For the most part, the interline booking process is managed by the global distribution system or central reservation system for the validating airline. Itinerary curation is fairly straightforward: on a passenger’s or agent’s request, the GDS or PSS builds an itinerary. If there are no direct flights, it builds options for complex routes from the list of interline agreements, published schedules, and Minimum Connection Times (MCTs). The schedules and MCTs are then received from data aggregators or directly from carrier reservation systems. Pricing and other data related to the itinerary are sent to a validating airline, and then once the flight takes off, the operating airline bills the validating carrier for their role.
Codeshare flights are an extension of interline agreements, wherein two or more airlines have a commercial agreement that enables one airline to operate a flight while another markets and sells the tickets for that flight using its flight number and code. This higher level of commercial integration allows airlines to sell each other’s flights as their own, compared to Interlining’s lower level of integration which focuses on cooperation in ticketing, baggage handling, and transfers.
Virtual Interlining: The Evolution of Self-Connection
Interlining, or the idea of an airline selling services to a customer provided through another airline, has been the cornerstone of the aviation industry for decades. However, with alliances and agreements changing often, low-cost fares, more diverse destinations, and many players operating outside of traditional lines, the original model is constantly improved upon as airlines, technology providers, and online travel agencies identify new revenue models that answer the needs of the increasingly modern traveler.
Enter, Virtual Interlining. Virtual Interlining (or VI) is a travel plan where multiple flights from different airlines are combined to create a single itinerary for a passenger. In a virtual interlining scenario, a passenger can book a journey involving multiple flights with distinct airlines. The flights may not have any formal partnership or agreement, but through the VI platform, they are coordinated to create a connected travel experience. The platform ensures that the passenger's baggage is checked through to the final destination and assists in managing flight transfers, essentially providing passengers with a digital itinerary that accounts for traveler mishaps, so passengers don’t need to worry about their baggage or delays.
Unlike traditional interlining, where airlines have formal agreements and partnerships to facilitate seamless transfers and baggage handling, virtual interlining is largely facilitated through technology and third-party platforms. The key advantage of virtual interlining is that it provides a more flexible and cost-effective travel option. Passengers can choose from a wider range of airlines and routes to create a customized itinerary that suits their preferences and budget. For example, travelers could save money by combining flights from different airlines to create a more affordable overall fare compared to booking each leg separately.
Imagine you're planning a trip from New York to Bangkok, and you're looking for the best flight options. Through virtual interlining, two major airlines teamed up with a third-party platform, let's call it 'VirtualTravelConnect,' to offer you a seamless and cost-effective solution. You book your ticket through VirtualTravelConnect, which combines one airline flight from New York to Dubai and another airline flight from Dubai to Bangkok into a single itinerary. Even though these airlines don't have a traditional partnership, the virtual interlining platform ensures your baggage is checked through to your final destination, and it takes care of managing the connection. This not only expands your choice of airlines but also saves you money, providing a more convenient and flexible travel experience that bridges the globe.
While this may be a fictitious example, there are plenty of real-world players working together to meet the needs of independent travelers. Effective partnerships are vital to making virtual interlining a reality since the challenges of creating a single travel plan out of multiple systems and data sets are significant - though not impossible.
Critical for Takeoff: Harmonizing Technology, Simplifying Data
With over 150,000 airline schedule changes a day, the ripple effect on the virtual interlining solutions can be significant. Improving data quality and freshness offers independent travelers more options and opportunities for personalization, though it doesn’t guarantee that different airline systems will be able to communicate.
You may be asking then, how does this work? By seamlessly interfacing with an airline's system through an Application Programming Interface (API). This API connection establishes a bridge that directly links the airline with Full-Service Carriers (FSCs), Low-Cost Carriers (LCCs), and multiple data sources. This integration enables a range of benefits, including network expansion, the creation of new routes, and the ability to cross-sell seats and ancillary services without the need for numerous complex commercial agreements. Consequently, passengers can conveniently purchase multi-leg journeys and additional services with a single reservation.
Furthermore, technologies underpinning virtual interlining offer various features, such as an AI-based algorithm for constructing itineraries, mechanisms to safeguard passengers against travel disruptions (e.g., through travel insurance vouchers or coverage provided by the platform), super Passenger Name Record (PNR) building capabilities, support for seamless through check-in, integrations with airport systems to facilitate efficient baggage transfer services, and compliance with New Distribution Capability (NDC) standards, ensuring readiness for forthcoming significant innovations.
This is why travel data that exists in disparate systems makes it impossible for this model to work. Organizations must invest in technology that provides real-time travel data in a single, centralized location that all aviation sectors have access to, whenever and wherever. Travel personalization can’t happen if the industry isn’t on the same page.
Major Players Making Virtual Interlining Happen
Airsiders sells virtual interlining flights via its booking channel. The content is full-service, which accounts for any flight changes and means passengers’ bags are through-checked. Airsiders offers a connection guarantee that ensures passengers are rebooked in case they miss their flight.
Dohop is an Icelandic technology company leading the mission to revolutionize travel connectivity. They provide virtual interlining and intermodal technologies that enable airlines to sell connecting itineraries without the need for codesharing or traditional interline agreements.
Tripstack was one of the first technology companies to offer virtual interlining fares. It continues to innovate its products to create unique flight itineraries at the lowest possible price. Tripstack anticipates that VI will represent 12 to 15 percent of all flight bookings in the future
Virtual Network, Real-Life Benefits Advantages for the Entire Travel Ecosystem
Whilst technology delivers the solutions, the whole sector can benefit from this wave of innovation. For online travel agencies, airports, and airlines, sharing critical travel data makes it possible to collaborate and create more choices, options, competitive fares, and personalization. For airlines, virtual interlining provides an opportunity to expand their virtual network and appeal to a wider customer base.
Airlines that start to utilize this technology on their websites can increase conversions, attract more bookings at minimal cost, and add to those all-important margins. Virtual interlining can also deliver revenue wins for airports. More choices, route offerings, new destinations, and experiences, bring more passengers to the airport increasing revenue for retail, restaurants, and services without the need for a huge investment.
As this market evolves, virtual interlining could be increasingly profitable and competitive. But without investing in the right technology and the right data partner, airlines, OTAs, and technology providers who want to offer virtual interlining will continue to find it a challenge.
This article was edited with relevant updates on 6th November 2023.