ABSTRACT
The multilateral interline system organized by the International Air Transport Association (IATA) might be considered as one of the last relics from an era in which cooperation among independent airlines was much more common than competition between airlines and airline alliances. Since the 1950s, interlining has been an essential feature of international aviation. Based on several multilateral agreements, IATA has developed a complex interline system, enabling passengers to ‘seamlessly’ combine the services of two or more independent airlines. As the traditional IATA interline system included a comprehensive tariff consultation and coordination mechanism, it evoked a growing opposition of antitrust authorities throughout many countries, finally forcing IATA to reorganize the entire interline system. In this chapter, the traditional as well as the recently modified IATA interline system for passenger transport 1 will be analysed from an economic point of view, dealing with consumer benefits as well as with potential impediments on competition.
