Who really benefits from airline codesharing?

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It’s one of those unaskable questions in the travel industry, akin to challenging church dogma.

But Stan Levy dares to say it, and I dare to publish it: Why do they allow airline codesharing?

“What benefits are there for the traveler of these arrangements?” he wonders.

I’m struggling to find a compelling answer. Maybe you are, too.

Levy has a reason to challenge the sacred canon of the airline industry, which states that airline alliances are a “win-win” proposition for both airlines and loyal frequent fliers.

He recently booked a flight from Cleveland to Auckland, New Zealand, on United Airlines, an airline on which he’s earned elite status. But he didn’t fly on United. Because of the perplexing wonder of codesharing, the tickets were on Air Canada and Air New Zealand, he says.

“In both cases we learned to our regret that the perks that were obtained from United did not transfer, or worse, that weight allowances were less for our bags, or that privileges such as club access did not apply because we were not on a United ticket,” he says.

Ah, I can hear you defenders of the faith saying, “That’s because Levy wasn’t elite enough.”

Come on.

Codesharing is a hot issue in Washington now, with the latest Transportation Department rulemaking requiring improved disclosure of these airline alliances, which would avoid the surprise Levy experienced when he reserved his tickets. If the rules are put in place after the 90-day comment period, it would be far more difficult for United to pretend that it’s flying a passenger all the way from Ohio to New Zealand on its planes, and leaving them with the impression that they’ll enjoy all the “benefits” of the airline.

Actually, from where I’m sitting, there are zero benefits to these alliances. Sure, they allow a small group of dishonest travel hackers to game the system, and yes, there are some limited reciprocal amenities for other passengers.

But think about it. The airline gets to claim it is flying somewhere that it isn’t. It’s getting a government license to not compete with some of the other airlines flying on that route.

How is not competing good for passengers? Someone care to enlighten me?

To Levy and others who have contacted me, codesharing also seems like a bait-and-switch technique. Because the benefits that are offered inevitably don’t turn up as promised. The luggage allowance is a little less, and you have to pay for a bag that should be included in the fare. The promised mileage doesn’t materialize because it was a “codeshare” flight.

“American and United tout how important these alliances are,” says Levy. “My wife and I, however, fail to see any value. On some trips we even have had to argue for the mileage on the code-shared airline.”

He’s lucky. Some codeshare flights don’t include miles at all, although they fail to inform passengers of it upfront. It’s yet another “benefit” of being part of an alliance. You get to assume you have something that you don’t.

I have a hard time getting worked up over loyalty program “benefits” because I believe everyone deserves to be treated well on a flight. The seats should offer a humane amount of legroom and width; the meals should be edible; the air breathable.

Yeah, call me a socialist. I’ve been called worse.

My big concern is the tens of billions of dollars of our collective money the airlines have pocketed by colluding with each other instead of competing. They’ve managed to cover up their illegal activity — yes, it’s illegal — with clever marketing-speak and by paying off a small army of blogging apologists.

Stan, make no mistake. Airline alliances only benefit airlines.

Should the government allow current airline alliance permissions to sunset and force airlines to compete again?

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  • John Baker

    The only people that argue against code sharing are those that live near a major airport with mainline service from multiple airlines. Those of use stuck with RJ service love it because its that only way to get somewhere.

    There is one change that must be made though. If I’m flying on a UA ticket on a UA flight number I should have whatever benefits I receive flying UA regardless of whose paint is on the outside of the plane.

  • Nevsky2

    The antitrust exemptions for the airlines should be ended. Foreign airlines should be allowed to operate in the US if US airlines given similar rights and US crews are used.

  • TonyA_says

    Who benefits? Of course the airline or else they won’t do it.
    But codesharing is not necessarily collusion but it can be.
    Collusion is what you get when the governments grant airlines joint ventures immunity (to fix prices).
    The other bad effect is outsourcing. That is when the legacy airlines cut cost by outsourcing flights to regional carriers (hence you see codeshared flight numbers) that pay their staff like they are in the third world.

  • VoR61

    As so often happens, the IDEA of codesharing is (or at least can be) a good one (IMO). It’s the IMPLEMENTATION that drives everyone crazy …

  • Air

    There is no compelling reason to allow airlines to collude – which is what code-sharing is as opposed to competing. I’ve been in the business of travel since 1993 and when the DOJ and other govt agencies started allowing code sharing I remarked that there were no benefits then except for the airlines. There is a lack of competition in this industry and that is a major contributor to the ho-hum to poor service provided by US flagged carriers.

  • BobChi

    The only problems with code sharing are for those who can´t see the obvious notice when making their reservations. This is not rocket science, and it´s borderline insulting that Chris seems to think his readers are too dumb to figure it out. I think code sharing works just fine, and really this running to the government over every whim concerning air travel gets tiring.

  • justmeeeee

    Code sharing and alliances are different things. I do derive some benefits from the Star Alliance, such as early boarding, elite check-in on my Austrian and Lufthansa flights within Europe. The best is use of the lounges in Europe, where lounges are actually really, really nice places with really, really nice food and service (unlike the fake-carrots-in-a-plastic-bag offered in the UA lounges).

    But the code-sharing idea isn’t doing much for me, especially since I almost NEVER earn miles for the code-share flights, and certainly UA NEVER discloses this up front–in fact, they add the miles into my total on the reservation and say I “may” earn xxxx miles for this itinerary. That’s a recent development–it used to be if I were not going to get the miles, they would not add them in up front. It’s all to deceive the less experienced traveler, I am sure.

  • mike313

    I recently flew business class from Washington to Johannesburg on UA ticket stock, but the aircraft was actually South African Airways. To my shock I was not allowed access tot he UA Global Business lounge near gate C3; despite my having Global Services status, and was told to use the United Lounge (ex-Rad Carpet) at gate C7. The C7 Red Carpet folks advised that I could not use their lounge either but needed to use the Lufthansa lounge near gate D7 (as SAA had an arrangement with Lufthansa for business travelers to use the LH lounge).
    Extremely strange UA policy; but on the very bright side the LH lounge at IAD is extremely far superior to the best lounge that UA offers. In fact the UA business lounge near gate C3, is positively Neanderthal in its furnishings and meal offerings.
    When I later complained to senior UA management at UA HQ, they responded that as the ticket was code share, they had to split the ticket revenue with SAA, and as such they could not allow me to use their lounge. So much for 30 years of customer loyalty!