Have you ever flown on another airline despite buying your ticket on a different airline? Welcome to the world of codeshares and alliances.
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In just two and a half years the airline world radically changed from mid-1997 to early 2000 with the creation of three airline alliances. Airlines used to fend for themselves, each competing against the other but would sometimes partner with other carriers to consolidate flights and fill empty seats.
Once airline alliances were formed that all changed.
There are three major alliances:
- Star Alliance (the largest and oldest, United, Lufthansa, Singapore)
- oneworld (second largest and most premium, American Airlines, British Airways, Cathay Pacific)
- Skyteam (last and smallest, Delta, KLM/AirFrance, Korean Air)
Codeshares and Joint Ventures
When airlines work together, they can do so legally in three ways: codeshares, joint ventures, or alliances (which can involve either of the previous two.) Codeshares are when one airline operates a flight, for example: Dallas to London, but other airlines can also sell seats on that flight and earn some of the revenue.
At the gate for a Dallas to London flight on an American Airlines jet, some customers will have purchased their tickets from British Airways. Others may be flying from Tokyo to Dallas to London and bought a Japan Airlines ticket. While passenger tickets may say British Airways or Japan Airlines, it’s neither of those airlines at the gate.
Joint Ventures take this a step further. American Airlines and British Airways have a joint venture across the Atlantic ocean. This allows the carriers to share the revenue and the cost from a flight (Dallas to London) 50/50 when they sell tickets on the flight.
Airline laws are strict. Competing airlines sharing revenue and costs (to avoid monopolies) are rare so each joint venture has to be rigorously vetted and approved before they can begin operating together.
How Do I Know When This Happens?
Have you ever searched for flights online and seen one logo selling the ticket but fine print below that stating “operated by?” This means that there is either a codeshare, joint venture, or airline alliance fare at work. When conducting a flight search, especially for international flights, this will often be the case.
However, your trip tickets aren’t adversely affected by the switcheroo at the gate. Rather, sometimes this can be a good thing. Hacker fares are constructed by looking for opportunities where one can leverage a lower price point for better service.
For example, United might offer flights to Tokyo for $450 to compete with American Airlines, but the flight is actually operated by ANA, an excellent Japanese airline. Using search sites to find the information in advance can be helpful to determine which flights are codeshared and which are not.
Why Do Airlines Do This?
By teaming up together instead of fending for themselves, airlines could serve fewer destinations directly, adding convenience for customers and cutting costs. Before alliances, if a traveler wanted to fly to the Canary Islands, they’d have to fly a carrier and its “tag” route. For example, a traveler might have to fly from Los Angeles to New York to London to Gran Canaria all on the same airplane.
In essence, it was expensive for airlines, inconvenient for passengers, and involved a lot of logistics. Imagine Hyundai opens a new manufacturing facility in Louisville, Kentucky. There is likely a lot of personnel from the US headed to Korea to train and management from Korea headed to Louisville. But the size of the airplane that would be needed for long-distance flying holds hundreds of people and wouldn’t be economical for the airline or for Hyundai. Instead, passengers might fly Seoul to Atlanta and Atlanta to Louisville. It’s a lot easier for Delta to fill flights both to Seoul and to Louisville from Atlanta using the appropriately sized aircraft and consolidating those flyers.
But for Hyundai management who is based in South Korea, they don’t have any affiliation with the Delta. Instead, they prefer Korean who otherwise better serves their needs. Using an alliance, they can have a seamless experience and get to their destination easily and quickly for a fair price.
Are There Advantages?
Even when you’re flying a different airline than the one that’s on your ticket is that you will still earn frequent flyer points in your preferred program. If you like American Airlines Advantage miles but find yourself flying Casablanca to Boston – you’re in luck. You’ll still earn your miles when flying oneworld alliance partner, Royal Air Morocco.
You also may find a better onboard experience, like ANA over United, or British Airways over American Airlines.
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