Cooperative Agreements, Code Sharing, and Alliances

Cooperative Agreements, Code Sharing, and Alliances

Could the U.S. domestic market code-sharing and the U.S. foreign airline partnerships be deemed comparable? Explain.

From the analysis of the insights in the information sheets, it is justifiable to deduce that the United States foreign airline alliances and the United States domestic market code-sharing can be viewed one and the same. Basically, code sharing is a commercial agreement between two carriers that grants freedom to one airline to put a two-letter identification code on another airline’s flights with a similar appearance to the computerized reservation systems, which allows the airline to advertise the flights as their own (U.S. General Services Administration, 2018). In the case of U.S. foreign alliances, the operations are similar since they allow airlines outside the U.S. to use code-share practices. Usually, alliance contracts are accompanied by requests for relief from some antitrust laws that can potentially hinder the two airlines’ partnership on the level of some aspects.

Ideally, international alliances and domestic code-shares serve the same purpose in aviation. The significant difference is that one operates within the borders while the other operates beyond the borders. Partnerships are beneficial to airlines since the agreement allows one airline to conduct service connection capabilities and flier miles beyond their operational areas. Foreign air carriers and United States carriers can request a grant of shielding from antitrust regulations on specific commercial alliances as provided by the 49 U.S.C 41308-41309 (U.S. Department of Transportation, 2015). Such shielding enables such airlines to regulate their capacity, services, and prices like they were operating alone in the markets, though vulnerable to specific conditions.

References

U.S. Department of Transportation (2015). Alliances and code-shares. Retrieved from https://www.transportation.gov/policy/aviation-policy/competition-data-analysis/alliancecodeshares

U.S. General Services Administration (2018). Code-share fact sheet. Retrieved from https://www.gsa.gov/travel/plan-book/transportation-airfare-rates-pov-rates-etc/airfarerates-city-pairs-programs/resource-library/code-share-fact-sheet

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Read the following information sheets:

Alliances and Codeshares/U.S. Department of Transportation (Links to an external site.)
Code Share Fact Sheet/U.S. General Services Administration (Links to an external site.)
Write a one-page (not including cover and reference pages) APA-formatted summary report that answers the question: Can the U.S. domestic market code-sharing and the U.S. foreign airline alliances be considered one and the same? Why or why not?