aio86
Posts: 910
Joined: Sat Sep 16, 2000 12:16 pm

Questions About Code Share Flights

Wed Mar 01, 2006 8:36 pm

Hi all,

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)?

Thank you for your responses and insight.
 
aio86
Posts: 910
Joined: Sat Sep 16, 2000 12:16 pm

RE: Questions About Code Share Flights

Thu Mar 02, 2006 9:23 am

Any one?

I find it hard to believe that no one on this forum knows these answers.

Thanks again.
 
6thfreedom
Posts: 2628
Joined: Thu Sep 30, 2004 11:09 am

RE: Questions About Code Share Flights

Thu Mar 02, 2006 2:48 pm

OK,
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...
 
User avatar
legacyins
Posts: 1836
Joined: Sun Aug 31, 2003 1:11 pm

RE: Questions About Code Share Flights

Fri Mar 03, 2006 2:37 am

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.

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