A codeshare agreement, sometimes simply codeshare, is an aviation business arrangement where two or more airlines share the same flight. A seat can be purchased on one airline but is 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 two-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.
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In 1967, Richard A. Henson joined with US Airways predecessor, Allegheny Airlines, in the nation's first codeshare relationship.[1] The term "code sharing" or "codeshare" was coined in 1989 by Qantas and American Airlines,[2] and in 1990 the two firms provided their first codeshare flights between an array of Australian cities and U.S. domestic cities. Code sharing 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.
Under a code sharing agreement, participating airlines can present a common flight number for several reasons, including:
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 leveled against code sharing by consumer organizations and national departments of trade since it is claimed it is confusing and not transparent to passengers.[4]
There are also code sharing agreements between airlines and rail lines. These as more formally known as an air-rail alliance, but more commonly known as Rail & Fly due to the popularity of the Deutsche Bahn codeshare with many airlines.[5] 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 current air-rail alliances or a list of IATA-indexed railway stations. In Europe these air-rail alliances 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.