Before 1978, when airline fares and routes were regulated by the US Civil Aeronautics Board (the predecessor to today's Federal Aviation Administration), they all had to follow the same set of rules, including those dealing with "irregularities" such as canceled flights. One of these rules, number 240, specified that if an airline couldn't get you to your destination on time, it was required to put you on a competitor's flight if it would get you there faster than your original airline's next flight. Airlines were even required to put you in first class if that's all that was available. Airlines rarely advertised this perk, however, since they naturally didn't want to fork over scarce cash to fly customers on a rival carrier, but seasoned road warriors have always known they could approach the counter and say the magic words "240 me" to be put on the next flight out.
Airlines formed after deregulation—such as JetBlue, Southwest, and Spirit— were never required to follow these rules. Even so, some of these newer airlines may attempt to put you on another airline if there's no other choice. "While we don't have a traditional Rule 240," says Todd Burke, JetBlue's Vice President for Corporate Communications, "we will purchase confirmed seats as necessary on another airline to get customers to their final destination in the event of irregularities within our control." In addition, if there's a "significant delay" JetBlue's compensation may include a "partial or full refund" in addition to accommodation on another airline.
In recent years, however, as "legacy" carriers such as American, United, and Delta struggle to remain profitable, and some attempt to emerge from bankruptcy, many have quietly weakened their Rule 240s.
United, for instance, no longer states in its contract of carriage that it will fly you in first class, if that's all that's available, on a competitor, although it will transport you in coach class on another airline.
Delta although it still has a rule 240 in its contract, no longer makes any mention of transporting passengers on other airlines in the event of a flight disruption.
Continental will upgrade a delayed passenger only on its own flights—not on a competitor's--and only if doing so will get you to your destination earlier than would otherwise be the case.
US Airways has nothing in its terms of transportation concerning Rule 240, although spokesperson Amy Kudwa says that the airline still applies the rule except on international flights.
Northwest Airlines has a very traditional contract, little changed from the days of regulation. It will put you on another airline, in first class if necessary, if your original flight is delayed 60 minutes or longer.
It's important to emphasize that these rules generally apply to situations within the airline's control, such as mechanical problems; but if the flight irregularity results from a "force majeure event" (things such as weather, riot, or a work stoppage) then all bets are off. And the legacy carriers may not have agreements with their newer competitors such as JetBlue and Southwest, so that they might not reroute you on those carriers.
Even if you are flying an airline that adheres to Rule 240, owing to the financial implications its employees may be reluctant to rewrite your ticket on a competitor. So it pays to print out and carry a copy of the contract of carriage and present it to the gate agent if necessary.