Aio86 From United States of America, joined Sep 2000, 929 posts, RR: 0 Posted (9 years 7 months 1 week 1 day 12 hours ago) and read 2683 times:
I would like to ask a couple questions about code sharing in general.
I understand the premise of an airline puting its code on a flight operated on another airline's metal. My questions are the following:
1. When an airline codeshare's on a flight, and they sell a seat on another flight, do they make any revenue or does it go straight to the operating airline? Do they get allocated a certain number of seats that they can sell per flight until the operating airline sells out or are they given their own stash of X% of the seats to sell. This seems rather difficult when you see a UA flight from LAX-ORD with seven other airlines' codes on it. To give an example, when AS sells a seat on a SFO-LAX flight opperated by AA, who makes the profit?
2. Similar question is how airlines can sell cheaper tickets than on the opperating airline. I wouldn't call it common, but I have looked for tickets and two examples of this come to mind. One, LAX-SFO flights being cheaper when bought through AS than through AA when AA is opperating the flight and LAX/SFO-PEK being sold for less by Air China though operated by United. What happens when Air China is government owned and can (potentially) set prices lower than competition because of its cash resources? Has this ever been a problem (in terms of the case we are discussing here)?
6thfreedom From Bermuda, joined Sep 2004, 3356 posts, RR: 19
Reply 2, posted (9 years 7 months 1 week 18 hours ago) and read 2593 times:
this is my understanding.
There are two forms of codeshare. A blocked seat arrangement, or freesale.
On a blocked seat arrangement, the marketing carrier will purchase any given number of seats the operating carrier.
The price is pre arranged for a certain period of time.
So, the marketing carrier might purchase 4 first, 10 business and 20 economy seats at $1000, $800 and $500 respectively. Regardless of whether it sells them or not, it must pay the opearting carrier that amount.
In this scenario the operating carrier might offer them at a good rate, as it provides fixed income regardless of whether they are sold or not.
Under a freesale agreement, the marketing carrier can sell as many seats as long as they are availble in that class. Again, there is a slight reduction to the marketing carrier on the net rate, so that profit goes to them.
2. If an airline has a blocked space arrangement and isn't able to sell those seats, particularly during low season, it is best for them to sell those seats at a loss and earn some revenue, rather than not selling them at all.
I'm no expert in the area, but I hope that helps...
Legacyins From United States of America, joined Aug 2003, 2267 posts, RR: 0
Reply 3, posted (9 years 7 months 1 week 6 hours ago) and read 2558 times:
Well I can tell you that I take advantage of codeshare agreements all the time. I travel from SFO-Beijing about three times per year. I always buy a business class ticket through Air China but fly on UA Aircraft. The average fare for CA is $3500 compared to $5000 on a UA ticket.