Monday, July 18, 2011

Interconnection Incentives—The Commercial Aviation Example

            One would think airlines affiliated in one of the three major alliances would have a keen interest in interconnecting their reservation and other networks.    But even these motivated carriers come up short, largely because interconnection means more than the physical joining of lines.  Interconnection in commercial aviation requires affiliated airlines to use the same software, or at least devise ways for different software to become more compatible.
            It happens less than you’d think.
            On several international trips my itineraries have required a change of plane and airline, all of which are affiliated in the Star Alliance.  On a code share, where United Airlines operated the aircraft, but All Nippon Airways may have ticketed the flight, United all but disavowed the fact that I was an upcoming passenger.  No access to seating charts, buck passing to ANA for any questions or issues, lower frequent flier miles, etc.  Of course ANA did not have access to the reservation, because it was on a United aircraft, so around and around I went.  On a few flights Lufthansa was convinced my wife and I were blind and repeated efforts to claim sight failed.
            The point here is that even when carriers have motivations to cooperate and interconnect, incompatible operating software and protocols gum up the works.  So when unwilling and uncooperative parties have to interconnect imagine how many issues can arise that frustrate consumers.
            Despite efforts to emasculate and dilute the meaning of common carriage, both airlines and telecommunications service providers still have duties to cooperate.  Airlines—even those in separate alliances—generally have to accept baggage and passengers that may have originated or will terminate on another carrier.  Telecommunications generally have to accept traffic from other carriers.  But with and without incentives to cooperate bad things happen.  Without a referee consumers may end up short changes and some grand long term marketplace remedy seems far, far away.

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