Codeshare agreement

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A codeshare agreement, sometimes simply codeshare, is an aviation business arrangement where two or more airlines share the same flight. A seat can be purchased on one airline but is actually operated by a cooperating airline under a different flight number or code. The term "code" refers to the identifier used in flight schedule, generally the two-character IATA airline designator code and flight number. Thus, XX123, flight 123 operated by the airline XX, might also be sold by airline YY as YY456 and by ZZ as ZZ9876. It allows greater access to cities through a given airline's network without having to offer extra flights, and makes connections simpler by allowing single bookings across multiple planes. Most major airlines today have code sharing partnerships with other airlines and code sharing is a key feature of the major airline alliances.

Under a code sharing agreement, the airline that actually operates the flight (the one providing the plane, the crew and the ground handling services) is called the operating carrier. The company or companies that sell tickets for that flight but do not actually operate it are called marketing carriers.

History[edit]

In 1967, Richard A. Henson joined with US Airways predecessor, Allegheny Airlines, in the nation's first codeshare relationship.[1] The term "code sharing" or "codeshare" was coined in 1989 by Qantas and American Airlines,[2] and in 1990 the two firms provided their first codeshare flights between an array of Australian cities and U.S. domestic cities. Code sharing has become widespread in the airline industry since that time, particularly in the wake of the formation of large airline "alliances". These alliances have extensive codesharing and networked frequent flyer programs.

Reasons and advantages[edit]

Under a code sharing agreement, participating airlines can present a common flight number for several reasons, including:

For passengers[edit]

  • Connecting flights: This provides clearer routing for the customer, allowing a customer to book travel from point A to C through point B under one carrier's code, instead of a customer booking from point A to B under one code, and from point B to C under another code. This is not only a superficial addition as cooperating airlines also strive to synchronize their schedules and coordinate luggage handling, which makes transfers between connecting flights less time-consuming.
  • Shared responsibility between the carriers: When flying between two cities without a single-airline connection, the passenger can pick a codeshared flight over two airlines or two flights booked separately. If the flights are not codeshared, then the second airline has no responsibility if the passenger or luggage misses the second flight due to a delay with the first. Under a codeshared flight, the second airline is unlikely to charge extra fees or deny boarding should the first, cooperating airline cause a delay.

For airlines[edit]

  • Flights from both airlines that fly the same route: this provides an apparent increase in the frequency of service on the route by one airline
  • Perceived service to unserviced markets: this provides a method for carriers who do not operate their own aircraft on a given route to gain exposure in the market through display of their flight numbers.
  • When an airline sacrifices its capacity to other airlines as a code share partner, its operational cost will generally be reduced to nil.[3]

Competitive concerns[edit]

Much competition in the airline industry revolves around ticket sales (also known as "seat booking") strategies (revenue management, variable pricing, and geo-marketing). Criticism has been leveled against code sharing by consumer organizations and national departments of trade since it is claimed it is confusing and not transparent to passengers.[4]

Air-rail alliances[edit]

There are also code sharing agreements between airlines and rail lines. These are more formally known as an air-rail alliance, but more commonly known as "Rail & Fly" due to the popularity of the Deutsche Bahn codeshare with many airlines.[5] They involve some integration of both types of transport, e.g., in finding out the fastest connection, allowing exchange between an air ticket and a train ticket, or a step further, the air ticket being valid on the train, etc.[6] In Europe these air-rail alliances are used to divide markets by selling these combination tickets abroad for a lower price to attract more customers. The systems also prevent local customers from buying these much cheaper tickets as the customer is only allowed to board the plane with a valid train stamp from a station outside the country.

See also[edit]

References[edit]

  1. ^ "Piedmont's Roots Run Deep". 
  2. ^ Financial Review, November 21, 1989
  3. ^ Sharkey, Joe (December 5, 2011). "Forget the Airline’s Name; It’s All About Alliances". The New York Times. Retrieved December 28, 2011. 
  4. ^ "What the Heck Is a Codeshare, Anyway?". ABC News. 
  5. ^ Rail&Fly
  6. ^ See also list of current air-rail alliances or a list of IATA-indexed railway stations.

External links[edit]