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Code-shares: How Do They Work In Practice?  
User currently offlineSankaps From United States of America, joined Jan 2008, 2255 posts, RR: 2
Posted (6 years 1 month 3 days 19 hours ago) and read 3287 times:

I've always been curious about this: How do airline code-shares work in practice? Do the airlines carve up the seats in a fixed ratio and each one sells independently? Or is each airline free to sell as many as they like on the code-share flight?

Also how is pricing done in the two scenarios? I guess if they each have a "quota" of seats to sell, they can set pricing individually and separately, with the operating airline being paid by the code-sharing airline for its quota of seats regardless. But if both are free to sell any number of seats on the flight, how can they set prices without under-cutting each other, without coordinating pricing (and falling afoul of anti-trust regulations)?

Is one scenario more common than the other?

Thanks!

Sankaps.

1 replies: All unread, jump to last
 
User currently offlineMats From Israel, joined Jul 2003, 637 posts, RR: 1
Reply 1, posted (6 years 1 month 2 days 8 hours ago) and read 3000 times:

Sankaps,
There are many permutations of codeshare arrangements. Here is a little bit of how I understand it...

1. Revenue sharing
Some arrangements, like Air France and Delta, have complete 50/50 revenue sharing. Regardless of the operating carrier, they each get half the revenue. So they don't really care who sells, as long as they both maximize the revenue. The plane could be all Air France passengers or all Delta passengers--each airline makes money.

2. Block space agreements
Other airlines purchase a certain number of economy/business/first seats on another airline's flights. If the seat goes empty, the operating carrier suffers no loss, but the selling carrier loses money.

3. Fee for departure
This is used when the flight is 100% codeshare passengers, such as a commuter airline. The network carrier pays the commuter operator a set fee per flight regardless of how many passengers are on board.

You might search through the Department of Transportation web site. Airline proposals and agreements for codeshares are in there. They redact specific price information, but everything else is in there.

Mats.


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