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Code sharing is a business term used in the airline industry for a procedure whereby one airline operates a service using its own flight number, e.g. XX123 and one or more other airlines, in agreement with airline XX, apply their own "code share" flight number to this operation. Most if not all major airlines nowadays have partnerships with other airlines, so called airline alliances. Code sharing is a major reason to start such a partnership.
The term 'code' refers to the flight number that is used in flight schedules. Under a code sharing agreement participating airlines can present a common flight number for:
- While obviously and importantly this paints a simpler picture to the customer, it is not only a cosmetic operation: cooperating airlines also strive to synchronize their schedules, thus making transfers between connecting flights less time consuming.
- Flights from both airlines that fly the same route
- This allows optimisation of the flight frequency on the route.
By using this possibility, carriers who do not operate their own aircraft on a given route may gain exposure in the market through display of their flight numbers. This also optimizes flight frequency on a given route
In GDSs, Global Distribution Systems, such as Amadeus, Apollo, Worldspan, etc, this results in the same flight details, except for the flight number, being displayed on computer screens excessively forcing other airlines flights to be displayed on following pages where they may be missed by passengers searching for required flights.
A lot of competition in the airline industry revolves around ticket sales (also known as 'seat booking') strategies. Travel agents have a preference for flights which provide a direct connection. Code sharing gives this impression. Computerized reservation systems (CRS) also often do not discriminate between direct flights and code sharing flights and present both before options that involve several isolate stretches run by different companies.
Criticism has been levelled against code sharing by consumer organisations and national departments of trade since it is claimed it is confusing and not transparent to passengers but without any success in changing the situation so far.
Code sharing agreements between airlines and rail lines
There are also code sharing agreements between airlines and rail lines. 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 IATA-indexed train stations.
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