Marketing Strategies-Code Sharing

Code-sharing arrangements are devices used in advertising, sales, and reservations activities that allow originating airline designations to be carried through to connecting airlines’ flight segments, including to the destination. These arrangements are often entered into between domestic and foreign airlines, or other end-to – end airlines, and between commuter carriers and major airlines. The first code-sharing arrange­ment was approved by the United States govern­ment in 1983, when antitrust immunity was given
to Pan American to advertise origin and destina­tion points on international routes that actually lay on domestic inland routes operated by north­eastern U. S. regional carrier Empire Airlines, not Pan American. Empire Airlines became a feeder carrier to Pan Am, and was the first of many to come in the U. S. airline market.

Code sharing is also used to eliminate poten­tial competitors from picking up an airline’s customers at interchange points by reserving the customer’s seat for his entire trip, and by issuing his through ticket, utilizing only the code-sharing partners’ airlines. The code-sharing device is depicted in computer reservations systems in user-friendly ways that enhance the likelihood of selecting the code-sharing route from origin to destination. Often it is not readily apparent to the traveler that two or more separate airlines are involved in the itinerary.

«British Airways believes that it is intrinsically deceptive for two carriers to share a designator code.»

-British Airways, comment on PDSR-85, Notice of Proposed Rulemaking, Docket 42199,1984