Codeshare agreement

Flight information display system showing several code-shared flights. For example: SQ6837, UA9569 and NZ703 are actually the same flight, operated by the latter.

Code sharing or codeshare is an aviation business term for the practice of multiple airlines selling space on the same flights, where a seat can be purchased on one airline as if actually operated by a cooperating airline under a different flight number or code. The term "code" refers to the identifier used in flight schedule, generally the 2-character IATA airline designator code and flight number. Thus, XX123, flight 123 operated by the airline XX, might also be sold by airline YY as YY456 and by ZZ as ZZ9876. It allows greater access to cities through a given airline's network without having to offer extra flights, and makes connections simpler by allowing single bookings across multiple planes. Most major airlines today have code sharing partnerships with other airlines and code sharing is a key feature of the major airline alliances.

Under a code sharing agreement, the airline that actually operates the flight (the one providing the plane, the crew and the ground handling services) is called the operating carrier. The company or companies that sell tickets for that flight but do not actually operate it are called marketing carriers or validating carriers.

History

The term "Code Sharing" or codeshare was first coined in 1989 (first flights operated in 1990) by Qantas Airways and American Airlines (Financial Review—November 21, 1989). In 1990, the Australian airline, Qantas Airways and the U.S.'s American Airlines combined services between an array of U.S. domestic cities and Australian cities creating the first codeshare arrangement as we now know it. It has become widespread in the airline industry since that time, particularly in the wake of the formation of large airline 'alliances.' These alliances have extensive codesharing and networked frequent flyer programs.

Reasons and Advantages

Under a code sharing agreement, participating airlines can present a common flight number for several reasons, including:

• Connecting flights – This provides clearer routing for the customer, allowing a customer to book travel from point A to C through point B under one carrier's code, instead of a customer booking from point A to B under one code, and from point B to C under another code. This is not only a superficial addition as cooperating airlines also strive to synchronize their schedules and coordinate luggage handling, which makes transfers between connecting flights less time-consuming.
• Flights from both airlines that fly the same route – This provides an apparent increase in the frequency of service on the route by one airline
• Perceived service to unserved markets – This provides a method for carriers who do not operate their own aircraft on a given route to gain exposure in the market through display of their flight numbers.

A further advantage to passengers is shared responsibility between the carriers. When flying between two cities without a single-airline connection, the passenger can pick a codeshared flight over two airlines or two flights booked separately. If the flights are not codeshared, then the second airline has no responsibility if the passenger or luggage misses the second flight due to a delay with the first. Under a codeshared flight, the second airline is unlikely to charge extra fees or deny boarding should the first, cooperating airline cause a delay.

Competitive concerns

In Global Distribution Systems, such as Amadeus, Galileo, Worldspan, or Sabre, this results in the same flight details, except for the flight number, being excessively displayed on computer screens, forcing other airlines flights to be displayed on following pages where they may be missed by passengers searching for required flights.

Much competition in the airline industry revolves around ticket sales (also known as "seat booking") strategies (revenue management, variable pricing, and geo-marketing). Most passengers and travel agents have a preference for flights that provide a direct connection. Code sharing achieves this. Computer reservations systems (CRS) also often do not discriminate between direct flights and code sharing flights and present both before options that involve several isolated stretches run by different companies.

Criticism has been levelled against code sharing by consumer organizations and national departments of trade since it is claimed it is confusing and not transparent to passengers.^[1]

Rail & Fly

There are also code sharing agreements between airlines and rail lines also known as Rail & Fly systems.^[2] They involve some integration of both types of transport, e.g., in finding out the fastest connection, allowing exchange between an air ticket and a train ticket, or a step further, the air ticket being valid on the train, etc. See also list of IATA-indexed railway stations. In Europe these Rail & Fly systems are used to divide markets by selling these combination tickets abroad for a lower price to attract more customers. The systems also prevent local customers from buying these much cheaper tickets as the customer is only allowed to board the plane with a valid train stamp from a station outside the country.

See also

• Airline alliance
• Change of gauge (aviation)

References

External links

• Article on prospect of codesharing between North American rail and airline connections