What Is a Code Share Agreement How Is It Important in the Aviation Industry Provide Example

There are three types of code-sharing agreements: the parallel operation, the connection operation, and the one-sided operation. Code sharing dates back to the 1960s. In 1967, Allegheny Airlines (now known as USAir) agreed to the first codeshare with a suburban airline in the United States (USA). Later, with the US Single Market Deregulation Act in the 1970s, the practice of code-sharing became even more popular. However, the term codeshare agreement was coined in 1989 with Qantas and American Airlines. The services they offered were a star style. In Europe, codeshare agreements became popular in 1993 after EU deregulation. In 2007, the European Commission published a final report on the impact of codeshare agreements with airlines on competition, which showed that 100 airlines surveyed had already signed a codeshare agreement with one or more airlines worldwide. Suppose United Airlines offers a flight with its own flight number and sells tickets for it.

However, the actual trip is operated by Delta Air Lines. Both airlines must have a commercial agreement to do so. Delta Air Lines is therefore a guaranteed income without having to spend money on marketing to its customers. And United Airlines sells tickets to customers, businesses and travel agencies without offering flight logistics. They usually share the benefits of this flight. Finally, unilateral operation occurs when an airline is in no way involved in the operations. So what does the carrier that does all the hard work gain from this kind of deal? It uses the other airline`s brand to get passengers to fly with them, as Pranchi Juneja wrote. Tip: One of the best ways to detect with a reasonable level of accuracy that you are on a codeshare flight is if the flight number format does not match similar flights from the same airline. The easiest way to determine if 2 airlines have an interline agreement is to use ExpertFlyer. However, if you already have a flight to a European hub like London Heathrow, you can make arrangements with another airline like British Airways to offer your customers connecting flights instead of stopping at London Heathrow. The U.S. Air Carrier Licensing Division`s codeshare list is an informal compilation of codeshare relationships.

As such, it does not represent a complete compilation of all code shares. New code-sharing relationships are constantly being negotiated, and those expressed in the attached list may or may not exist or be ongoing in nature. Similarly, the list may not reflect all existing code shares of a particular type or all types of existing code shares. This list is not an official document of the Department of Transport and therefore should not be used or cited as such. The term “code” refers to the identifier used in a flight plan, usually the two-digit IATA airline code and flight number. Thus, XX224 (flight number 224, which is operated by the xx airline) could also be sold by the YY airline as YY568 and by ZZ as ZZ9876. The airlines YY and ZZ are called in this case “Marketing Airlines” (sometimes abbreviated MKT CXR for “Marketing Carrier”). One of the biggest benefits of booking codeshare flights is the ability to enjoy elite benefits via status with the marketing airline. For example, if you are on a China Eastern flight marketed by Japan Airlines, you will immediately notice that the 2 airlines are not part of the same alliance. Codeshare agreements also develop the “existence” of an airline in a market where it would otherwise have no profile, thus supporting the marketing of its services by accepting the sale of its seats and tickets through a marketing airline that could be much better known in that market. Airlines present that they have more flights than they actually have, which contributes to their marketing and public relations.

Some airlines may sell premium economy class codeshare, but if one or more of the operating airlines don`t offer premium savings, you can automatically sit in economy class without warning or compensation. The aviation industry is one of the most competitive industries in the world. A large number of companies established in this sector are making losses. This is mainly due to their lack of efficiency. Since success in the aviation industry relies solely on efficiency, many companies have explored unconventional options to increase their profitability. One of these options is a codeshare agreement between airlines. Regardless of how you booked, the airline that operates the flight is the one you check in with. From the previous example, even if you purchased through United, you register with ANA, and every step of the process, including the plane, will be done through ANA. You are the only one who earns miles with United and pays your fare directly to United and not to ANA. In the codeshare agreement between United and Delta Air Lines in the example above, United Airlines is the “marketing” airline. Delta is the “operational” airline that actually flies the plane, transports passengers and provides pilots and flight attendants.

Much of the competition in the aviation industry revolves around ticket sales strategies (also known as “seat reservation”) (revenue management, variable pricing, and geo-marketing). Consumer organizations and national trade ministries have criticized code-sharing, saying it is confusing and not transparent to passengers. [4] The majority of airlines operating today maintain and practice codeshare partnerships with other airlines. Codeshare has become a key feature of major airline alliances. Codeshares are beneficial for airlines because they allow their passengers to reach new destinations that are not served by their own aircraft, meaning they can now offer a wider variety of destinations without having to fly there. Codeshares also help airlines focus their services on the destinations they already offer, thus offering more frequent services. Airlines have codeshare agreements because they want to be able to transport their customers to more destinations without having to buy more planes, hire more flight attendants, and pay more airport fees. Therefore, airlines are participating in partnerships to facilitate this agreement. But don`t be afraid. In this guide, we`ll talk about codeshares and interline agreements. First, we`ll describe what exactly it is. Next, we`ll dive into how you can tell if you`re codeshare or not.

Finally, we`re going to show you why you should be interested in codeshares. Start. The existence of a codeshare agreement with a partner airline can also increase the confidence of passengers and distribution channels that travel, including the partner, can be traded with the prospect of a good overall level of service in terms of product adequacy and fluidity of ticketing and aircraft connection agreements. It is believed that by improving customer reach, expanding the offering to airline passengers, and giving confidence to products offered in combination with other airlines, airlines will generate additional traffic that will increase their revenues at a relatively low cost. There`s a lot to like about codeshare and interline flights. I hope this guide has helped you understand the importance of codeshare/line spacing agreements in making the world of aviation even more connected. But there are a few pitfalls in booking a codeshare itinerary. Questions about code sharing can be directed to travel.programs@gsa.gov. These provisions relate to measures taken to treat passengers (such as check-in, flight transfer, baggage collection, etc.) and are specific to how disruptions are to be managed. In general, whenever problems arise on the day of travel, the operating airline must handle the situation on its own.

Conversely, if a flight is cancelled well in advance, it is common for the marketing airline to rebook commuters in codeshare on other available flights. Let`s introduce a bit of terminology. An operating airline is an airline that actually provides flight logistics, whether it`s airport slots, pilots, ground services, or operating permits. The marketing airline is simply the airline that sells codeshare tickets to its customers. Codeshare agreements have far more benefits for airlines and passengers compared to their shortcomings. The above clauses are the essential and fundamental clauses that a code-sharing agreement must contain. A well-designed codeshare agreement will allow airlines to operate in a cooperative relationship with other partner airlines, making their product competitive and profitable at the same time. It should be noted that airlines around the world are increasingly embracing code-sharing and entering into a legally binding and watertight agreement to ensure that no party is on the losing side due to ambiguity.

While it`s easy to understand that alliance airlines grant elite benefits through Star Alliance, Oneworld, or SkyTeam elite status, other airlines don`t. unless you are on a codeshare flight. Travelers can also earn airline miles from the airline they booked with, even if they are not members of the operating airline, provided both airlines are part of the codeshare partnership. .