JetService
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Joined: Mon Feb 21, 2000 1:12 pm

Regional Partner Vs. Codeshare

Sat Dec 18, 2004 12:56 am

Can someone explain to me in simple terms the differences in generating revenue for a regional partner for a large airline vs. a codeshare? Lets say some one flies from airport 1 to airport 2 on airline Y; connects and flies from airport 2 to airport 3 on airline Z (a major). If Y is a regional carrier for Z, how are they generally paid? If Y is a codeshare with Z, then how are they paid? (Assume RT of $400).
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ORDagent
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RE: Regional Partner Vs. Codeshare

Sat Dec 18, 2004 2:10 am

For example when UA sells flights on LH, UA leases a set amount of seats on the aircraft to sell as they wish including setting prices and inventory yield management. That's why the code share operating airline could be much less expensive for the same flights or vice versa. Depending on the agreement the airlines have with each other the code share carrier can release seats back to the operating carrier or vice versa. For international code shares the airlines are also subject to international agreements etc.

For a "partner airlines" such as an HP express operated by Mesa HP pays a fixed fee per flight based on the aircraft and negotiated contract. This just about guarantees a profit for Mesa unless fuel prices spike etc. That's why so many of the regional airlines are perpetually in the black. The only problem is that the mainline pilots union contract limits the size (usually less than 100 or 70 seats) or number of flights allowed to be flown by the regional. That is to protect the pilots since the regional carrier had lower labor costs.

[Edited 2004-12-17 18:22:43]
 
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KaiGywer
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RE: Regional Partner Vs. Codeshare

Sat Dec 18, 2004 5:41 am

In the case of XJ, a Saab is paid a fixed price, pax or not. The plane will go out empty (at least almost), just to make the fixed fee. I've met flights with 1 - one - pax on it. On the Avro on the other hand, we are paid per seat sold. At least this is how I remember it.
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