I recently read an article saying that Southwest Airlines is entering into a code share arrangement with a Canadian airline beginning SWA’s first international service. Does that mean that Southwest equipment will be entering Canada? Or does it just mean that I can purchase tickets to Canada on Southwest’s website or from their ticket agents? The article went on to say that Southwest Airlines plans on entering similar arrangements with airlines in other countries and eventually begin offering service to and from Europe. Will there soon be orange 737’s at Heathrow?
Just took a class on this. . .
“Code sharing” refers to two airlines (like a major and minor/regional) airline sharing the same ID codes on a flight schedule. The big airline can then theoretically ‘service’ smaller airports the regional airlines can, and the regional airlines can “get you across the country”. It’s a throwback to the days of regulation. But, in your case, SWA can then theoretically “use” the Canadian airline’s seat (which, is a perishable asset) to get you from somewhere say, Los Angeles to London.
It also allows airlines to advertise seats better in the centralized reservation system, and lets you connect through other airlines better. The mechanics are kind of long and boring, but basically, it’s a way to share the cost and revenue on a particular flight.
Tripler
I only share my codes with my lovely wife. Sorry.
Since you’ve just taken a class on it, could you provide a more detailed answer on how the revenues are split up? I can’t imagine that the “refering” airline (the one that doesn’t acually operate the flight) can be given more than a buck or two per ticket, but I’m very curious to know how the arrangements are actually structured.
Um, unfortunately, I don’t think there are hard-and-fast rules on exactly how those fares are split up. The textbooks alluded to legal arrangements and contractual agreements to dicate the movement of pennies. However, the strategy does help airlines press their services into newer markets without having to “spend airframes.”
Case in point: I had to fly into Clovis, NM for a construction project survey. I flew Northwest from Montana to Albuquerque, and then flew “Joe Bob’s AirHead Puddlejumper Inc.” from Albuquerque to in a 16-seat prop-job with only four of us on board (one was the pilot).
It works out because Northwest gets the benefit of booking a customer all the way through from Great Falls, MT to Clovis, NM, while Joe Bob’s gets the guarantee of business both in and out of Clovis.
From the class: both obviously get fares corresponding to the lengths of their route, and applicable taxes and landing fees. Both get the business, and IIRC, the one trip generates two flights because of the split of trip legs (important for beancounters and legislators). Most importantly, Clovis wins because they’re getting tourist/business income when normally nobody would want to go there because it’s so remote and difficult to get to otherwise (and for other reasons I allude to in a Pit thread or two).
I will have to read up on a chapter or two before I can get you a more detailed answer. For now, IIRC, it’s based on the length of the trip. Reservations all go through the same generic web services, so everyone shares that cost and revenue.
Tripler
Ooh, the business of the skies.
Good answers; concretely, SWA will sell tickets on their flight SW652 which will be the same airplane operated by WestJet as flight WJ1351 (as a fictitious example).
I imagine that, as in Clovis’s example, there will be some hub where you can transfer from a SW plane to a WJ plane into Canada, thus allowing Southwest to book connecting flights end-to-end from, say, Florida to Montreal, or whatever.
Yup. This ‘double-booking’ helps fill seats on one aircraft that would otherwise go unfilled (minimizing losses and maximizing revenues). As I mentioned before, seats are perishable inventory–once that airplane takes off and gets airborne, you can’t sell them again.
That’s part of the central reserve system. All those Orbitz, PriceLine, Kayak, etc. tap off the data and build trips for you, routing you to the appropriate connecting airfields. The business of cooperating/competing airlines vying for “gatespace” at an airport is a whole other ball ‘o’ wax though (yes, airfield facilities are a scarce commodity too!)
Tripler
Man, I love this stuff.
Let me see if I get this right:
Say I want to go from Austin to Toronto. I could go to Southwest’s website and purchase the ticket. I would get on a Southwest 737 in Austin and go somewhere (say Chicago), where I will change to a Canadian airline’s plane for the final leg into Toronto. The benefit to me is that I can make only one purchase through my favorite airline and get to Toronto. The benefit to Southwest and the Canadian airline is that they get me in the seat. The Canadian airline gets a bit of the cost and risk of the Austin to Chicago leg and Southwest gets a piece of the action from Chicago to Toronto. Everyone wins. But, no Southwest equipment actually has to travel to Canada.
The Canadian airline might never have otherwise gotten a guy from Texas on their plane, since (absent the code-share agreement) I would have sought transportation from an airline that goes from Austin to Toronto.
What is the “code” that is shared?
Former airline type …
You got it exactly.
The “code” is the identifier of the airline. In the reservation systems (“CRS”), each airline has a two-letter code. And flights are identified like AA1234 for American or UA3456 for United. All the obvious codes were used up by the 1960s, so that’s why Southwest is WN & America West is/was(?) HP.
If AA & UA code-shared, you’d have one airplane, owned & operated by, say. AA. AA would operate the flight as AA1234 but UA would let them share the UA code, labeling the same flight as UA4567. And each airline could sell seats on it as if it was their own.
As a practical matter, the big network carriers historically did not code-share with each other. Each had a stable of smaller partners, international partners, and from the mid 1980s, express/regional jet captive subsidiaries or partners.
Fast forward to today, and the airlines want to consolidate, but Congress & the DOT won’t let them. So now there is code-sharing between historical major competitors. In some cases, such as Delta + Northwest (DL +NW) it is turning into a merger.
AH HA moment.
So, that is why a recent flight was booked through Continental, but the plane said Continental Express. Next to the door, the plane said something like “Operated by ExpressJet as Continental Express.” ExpressJet actually owned the plane, but Continental sold the seat. I assume, then, that Continental paid ExpressJet for the privilege of taking me on my trip and ExpressJet got the seat sold without the trouble of conducting the reservation itself.
Cool.
I have to wonder though, and LSLGuy, please confirm my suspicion: this must be a practice over the rest of the world too. I can’t see British Airways not getting into this gig as well. . .
Tripler
It can’t be just an American thing.
Certainly it’s done on international flights as well; when I went to Ireland four years ago, I flew on a plane that had a United flight code but was owned & operated by Aer Lingus.
Color me mystified. I understand how code sharing could affect the designation of a flight, that is, whose name it goes under, like:
But I don’t see how it makes seat sales where there were none, to wit:
If I want to get from Podunk to Bumfist, and there’s only one airline that services one leg of the route, what difference does it make if I buy the ticket under Podunk Airlines (one ticket) or a ticket under Podunk Airlines and another on Bumfist Airlines? I can only occupy one seat at a time, and I’d be taking the same planes no matter how it was ticketed.
What I’m saying is: How does code sharing increase the overall number of seats sold, or if there’s only one airline available, increase the number of seats sold on that airline?
I’m guessing it’s because people are lazy, and they won’t necessarily search all airlines and airports. If you want to fly to Bumfist, chances are that first of all you’ll look on Big Well-Known Airline site. If it’s not there, you’ll look elsewhere. If it is there, thanks to a code-share, then you’ll likely book the whole trip in one go with that airline, rather than searching elsewhere.
No problem. Here goes:
Airline “A” has a hub in Timbuktu, and services Podunk. Airline “B” has a hub in Timbuktu, but only services Bumfist–it’s a small commuter airline. Both airlines “A” and “B” can only really fill 55% of the seats on the scheduled airliners phyically flying the route. I mean, who really wants to go to Podunk or Bumfist through Timbuktu?
However, because of code sharing, airline "B"s routes can be advertised through airline “A”, and vice versa. Now there’s an incentive for you to fly airline “A” to get to a connecting flight to “B”, and the incentive to “A” and “B” to carry you as an additional passenger because it bumps up their percentages to 56%. The financial incentive to you is that you only have to buy one ticket and thus, only pay one set of taxes, fees, and handling charges to book that trip (as opposed to paying twice the set for two legs). You have less work to do in making the transactions (i.e. less mouse clicks, and less credit card info entering), and it makes air travel magically easier for you–the airlines do all the legwork.
Another more tangible benefit is that you don’t have to physically drag your crap and re-check in to airline “B”. If the companies have done their homework, your baggage would be routed for you, and you (usually) wouldn’t have to exit security and go through the hassle of being patted down by the TSA. I have personal experience in this, in that I had to drag my friggin’ 300 lbs. of mobility/travel bags from Continental to the AMC desk at BWI. If Continental and the US Air Force had “code shared”, I would have had a much easier time deploying. But, they don’t.
If there’s only one airline available, it’s machs nichts–there’s no need to share codes, airline “C” will get you there anyway. In short: “code sharing” merges two flights from otherwise independent airlines into one. Sure, you could drive your way to Bumfist, but you’d prefer to get there sometime this century. Code sharing is a marketing tool which is a win-win for basically everyone concerned, except the credit card companies who make money on every transaction that happens (fractions of a penny).
Tripler
It’s all about an expansion of routes available to the customer (you).
Oh yes, and it’s a pain in the arse. Want to pay a bit more for a full-fare flight to seville rather than a bare-bones low-cost? Well tough, because Iberia have done a deal with Click Air on that route, so better start queuing two hours before takeoff, and you’re still paying Iberia prices for ryanair service.
Or you get a dozen prices for a flight from an airport which only has two flights a day because each plane has codeshares with a swarm of affiliate airlines. SAS fly the plane, they’re happy to sell you a ticket on it, and so are BMI, Lufthansa, LOT and all their little buddies. Gah!
See, I understood you up until that line.
Aren’t all routes available to all customers at all times? If you want to find a flight from A to B, does it not exist until you look at Airline C’s data?
I admit I haven’t flown for a long time so maybe this is a stupid quesiton, but if I use a general Internet search site to search for all carriers, all flights from A to B, won’t I see all flights available? Or do I have to try each airline’s individual site as some flights are invisible on other airline’s sites?
Well, yes, it does now. . . but back a while ago, it wasn’t as easy to book the connecting flights.
The flights are always available–they’re always there by virtue of the fact that the airline will offer them. Code sharing doesn’t generate flights, it just makes their marketing easier.
Airline “A” isn’t going to market a route on a competitor’s airline without a good reason. Code sharing joins competitive routes and adds new routes to those served by just one airline. In your first example, Airline “A” only flew from Podunk → Timbuktu. Well, by code sharing with “B”, you can get further along because “B” offers service from Timbuktu → Bumfist. Thus, with one trip itinerary, you can fly Podunk -“A”-> Timbucktu -“B”-> Bumfist.
It’s not a stupid question. It’s just that it’s usually taken for granted nowadays that you can do this (because it basically is for granted). There never was a restriction on routes. It’s just that your options for final destinations on your ticket open up on one ticket/itinerary thanks to the sharing of routes between “A” and “B”.
Tripler
Marketing. It’s all about marketing.
Tripler, can you link to that thread or two if you remember which ones they were? I wouldn’t mind reading other opinions about how much Clovis sucks. 
In many (most?) instances, the passenger on a code-shared flight benefits by accruing frequent-flyer miles with the original airline. In other words, if I have FF miles with United, and I book a trip with United whereby I fly from Kansas City to Washington on United, and then Washington to Frankfurt code-shared on Lufthansa, I get FF miles for the whole trip, not just the KC-DC leg.