There are many ways in which the airlines can enter into collaborative arrangement with one another for the benefit of the passengers who want to do flight booking on connecting flights. One way is to become a part of the regional or global alliances. Another way is to enter into the bilateral code-share agreements. And, yet another way is to form an interline agreement, which is often a precursor to the code-share agreements. There are reports of British Airways being in talks with IndiGo for the interline agreement. The two airlines are said to be in talks on ticketing and baggage sharing arrangement which is typical of an interline agreement.
If such an agreement does materialize, the people would be able to buy connecting flights on one ticket and they do not have to do flight booking on different airlines. The carriers are able to save the costs which they would have otherwise incurred on buying more planes and putting them on new segments. With these agreements the airlines are able to save these costs and also able to provide the cheap flights to the customers.
Another major benefit is that the carriers are able to expand their networks and are able to utilize their excess capacity in a better way by having the customers from the other airlines. These also increase the options available for the customers for getting the cheap flights on more flight segments. They are also saved from the procedures of baggage check-in while catching the connecting flights. The connecting flight provider stands to benefit as the passengers, who would have otherwise flown with some other carrier if these agreements were not in place, would now fly with these carriers.