Cooperative Agreements, Code Sharing, and Alliances

Can the U.S. domestic market code-sharing and the U.S. foreign airline alliances be considered one in the same? Why or why not?

The deregulation of the airlines has resulted in an increased sense of responsibility for international air transport. In order to maintain agreement and cooperation between both domestic and international airlines, entities such as codeshares and alliances have been created (p. 457). The United States Domestic Market Code-Sharing and the United States Foreign Airline Alliances can be considered one in the same because they both expand market presence and competitive abilities.

United States Domestic Market Code-Sharing allows benefits for both the airlines and the passengers. Usually occurring between airlines that have end-to-end connections, the passengers benefit through increased capacity of flights and frequency of services, overall leading to the extension of the routing system (Codeshare Fact Sheet, 2017). Foreign airline alliances provide the same type of benefits as code-sharing, just on an international level. Harry Lawrence (2021) describes how foreign airline alliances are able to promote joint booking systems, international flow, and hub systems. Joint booking systems within foreign airline alliances entail the sale of passenger seats through to a passenger’s destination with the addition of an easy journey and an increased chance that a customer is within an airline’s network. International flow within a foreign airline alliance reduces the complexities of having to negotiate bilateral or multilateral agreements, allowing airlines to use networks on a common basis. Hub systems within a foreign airline alliance create the presence of connecting hub systems with local feeder routes through regional airlines (p. 459).

Overall, United States domestic market code-sharing and foreign airlines alliances both benefit the airlines in similar ways, although foreign airlines alliances provide more because of the international presence. An example of airline alliances in the United States is Star Alliance, SkyTeam, and OneWorld. These alliances benefit both from international implications and United States domestic code-sharing. Within these alliances, passengers can benefit from easy travel and are more likely to use airlines within the alliance again.

References

Alliances and codeshares. U.S. Department of Transportation. (2021, January 12). https://www.transportation.gov/policy/aviation-policy/competition-data-analysis/alliance-codeshares

Codeshare fact sheet. GSA. (2021, July 7). https://www.gsa.gov/travel/plan-book/transportation-airfare-pov-etc/airfare-rates-city-pairs-programs/resource-library/codeshare-fact-sheet

Lawrence, H. W. (2021). Aviation and the role of government (4th ed.). Kendall Hunt Publishing.