An interline agreement is the most basic agreement and major airlines almost always have those with each other. Ending the interline agreement means neither airline will sell tickets on the other. And they won’t transfer baggage to each other, either.
It was sort of strange for Delta to terminate its agreement with American while it was continuing to have an interline agreement with one with its arch-enemies. Delta remained willing to sell tickets on Emirates even though 9/11.
Now that Delta has announced the elimination of its Atlanta – Dubai service effective February 11, an interline agreement with Emirates is much less valuable to them. Before the ability to sell tickets and transfer bags beyond Dubai would have supported the sale of their flight to the Emirates hub.
The stated reason they ended the American interline agreement was because American needed seats on Delta far more than Delta needed seats on American, so American should pay far more than industry standard for those seats. Apparently United agreed to terms like those. Although it’s Delta cutting off its nose to spite its face, because by definition this is revenue the airline would receive for seats that would otherwise go out empty. Still, they view it as tactical — they don’t want to help out a rival, unless they’re paid handsomely to do so, and are willing to forego revenue to take that position.
Interline agreements were once a basic level of cooperation between airlines to provide service to customers. Now for Delta they are a strategic business tool.
Delta plays hardball — with customers, suppliers, and with partners like Korean, which sees the SkyMiles program incentive for passengers booking onto the Seoul-based carrier obliterated when it doesn’t enter into a joint venture. And while they’re running a strong airline operation with significant profits, they can afford to do so.