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G-BYGB

All airlines have a codeshare agreement with other airlines for certain routes.A passenger has to change the airline after making a stop at one place to fly to other city.ASFAIK, AA has codeshare with S2,UAL has codeshare with LH and AI has codeshare with LH.

MY question is:

1. What are the benefits of a codeshare from the passengers point of view?
2. Why won't the airline operate a direct flight on its own,if it has sufficient amnt of fleet and pax flying there instead of a codeshare agreement? and
3. Which airline will benefit the most in a codeshare agreement?
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andrew · Member Joined: 24 Apr 2007 Posts: 212

Typically there are two main reasons for a code share:

1. Protect margins where demand is sluggish: eg QF and South African on the PER - JNB route or SQ and SAA on the SIN - JNB routes. Where there isnt enough competition, it makes sense to allow your flyers to fly on another airline whilst sharing the revenues without having to bleed each other to death through a price war.

2. Greater network coverage where demand is limited - eg: QF with 9W through SIN and VV. QF is competing against SQ which covers every major city in Aus (PER/SYD/MEL/BNE/SYD/ADL) daily and does the same for every major port in India (BOM/DEL/CCU/BLR and others thru Silk Air). QF is disadvantaged in being only able to take pax to BOM from SYD. But it links SIN to every major Aus city and can utilise the 9W network as it grows ex SIN to compete with SQ - given it cant hope to launch as many flights to India as it does not have the hub benefits SQ has in teh region. 9W on the other hand has a limtied need to go to Aus presently so the code share makes for gret synergies.

For AA the S2 code share made sense because it gave AA pax through coverage to various Indian destinations - and therefore a potential competitive advantage over other US carriers whilst a leveler against IC/ AI. For S2 - it was the ability to add a US location on its map before any other Indian private airline.

For 9W with SNB its similar. 9W gets coverage accross the EU with SNB (albiet with a crappy carrier) and SNB gets to issue trans-atlantic tkts to its pax for cities it does not cover at the moment.... The fifth freedom traffic for both carriers is the benefit.

So I guess the need for a code share is different on most ocassions. It woud be fair to say that they are good short term arrangements if you are not part of a major alliance - which often offers the same thing.

Code share arrangements are notoriously opaque. Eg: Can you ear nstatus credits as a frequent flyer or only FF Points? Do your FF status baggage allowances apply to the code share operator? Access to lounges? All of these are different for each code share agreement between airlines. It depends on who issues the ticket, what fare basis and a myriad of issues that leave pax often frustrated.

Its complicated for airlines too in terms of revenue sharing. Eg: on the PER JNB route - QF/ SAA truly share revenues (or used to anyway). On the SIN - BOM / DEL routes, QF gets bugger all and 9W keeps most of the revenue for that leg, whilst QF does the same for the Australian leg. That means however that FF allowances for baggage, lounge access and status credits do not apply (alll in the small print).....

Nimish · Posted: Mon May 07, 2007 4:15 pm Post subject:

An earlier discussion on the topic of code shares/alliance memberships is available at: http://airlinersindia.s4.bizhat.com/viewtopic.php?t=828&highlight=