Southwest Airlines has recently announced a new partnership with China Airlines, the flag carrier of Taiwan. This partnership will allow customers to book tickets on both airlines, connecting through one of China Airlines’ West Coast gateways. This move is part of Southwest’s efforts to overhaul its business model and expand its reach globally.
The Partnership Agreement
Southwest Airlines will begin selling tickets for flights to Taipei and beyond, with the leg across the Pacific being operated by China Airlines. The same will also be offered by China Airlines. Passengers will receive one boarding pass and have their luggage checked all the way to their final destination. This is a significant step for Southwest, as the airline has historically operated independently and only within North America. However, this partnership is considered the least comprehensive type of airline partnership.
Other types of airline partnerships, such as codesharing and joint ventures, allow airlines to share revenue, coordinate schedules, and offer frequent-flyer perks to passengers. This interline agreement does not offer these benefits, and there is no incentive for airlines to direct passengers to their partner airline. It can be seen as a starting point for Southwest to explore future partnerships.
Southwest’s Perspective
Southwest Airlines has expressed excitement about this new partnership, stating that it will allow China Airlines’ customers to experience their renowned Southwest Hospitality. Initially, the agreement will cover four of China Airlines’ five destinations in the United States, including Los Angeles, San Francisco, Ontario, and Seattle. However, New York-JFK is not included. Southwest has a significant presence in Los Angeles, but its presence in the other gateways is minimal. Nevertheless, China Airlines does not have many options, as it competes with Delta on routes between the US and Asia.
China Airlines’ Perspective
China Airlines is a member of the SkyTeam alliance, which includes Atlanta-based Delta. However, due to Delta’s trans-Pacific joint venture with Korean Air, there is minimal cooperation between the two airlines. This means that Delta and Korean Air essentially act as one on routes between the US and Asia, competing with China Airlines. Therefore, this interline agreement with Southwest allows China Airlines to fill up its flights to Taipei from Los Angeles, reducing the risk of competition from Delta and Korean Air.
Comparison to Icelandair Partnership
Southwest’s partnership with China Airlines mirrors its recent interline agreement with Icelandair. This partnership, which was launched in February and expanded to include Denver and Nashville, allows Southwest to send its customers to Europe through Icelandair’s hub in Reykjavik. Unlike the partnership with China Airlines, this agreement includes major hubs for Southwest and provides access to a large customer base for Icelandair.
Overall, these partnerships signal a change in the US airline market, with customers willing to pay a premium for international travel and the traditional all-economy, domestic-focused model becoming less viable. These agreements are a step towards increased cooperation between airlines, and it is likely that we will see more comprehensive partnerships in the future.