A codeshare agreement, also known as codeshare, is a business arrangement, common in the aviation industry, in which two or more airlines publish and market the same flight under their own airline designator and flight number (the "airline flight code") as part of their published timetable or schedule. Typically, a flight is operated by one airline (technically called an "administrating carrier") while seats are sold for the flight by all cooperating airlines using their own designator and flight number.
The term "code" refers to the identifier used in flight schedule, generally the two-character IATA airline designator code and flight number. Thus, XX123 (flight number 123 operated by the airline XX), might also be sold by airline YY as YY456 and by ZZ as ZZ9876. Airlines YY and ZZ are in this case called "Marketing airlines" (sometimes abbreviated MKT CXR for "marketing carrier").
Most of the major airlines today have code sharing partnerships with other airlines, and code sharing is a key feature of the major airline alliances. Typically, code-sharing agreements are also a part of the commercial agreements between airlines in the same airline alliances.
In 1967, Richard A. Henson joined with US Airways predecessor Allegheny Airlines in the nation's first codeshare relationship. The term "code sharing" or "codeshare" was coined in 1989 by Qantas and American Airlines, and in 1990 the two firms provided their first codeshare flights between an array of Australian cities and U.S. domestic cities. Code sharing has become widespread in the airline industry since that time, particularly in the wake of the formation of large airline alliances. These alliances have extensive codesharing and networked frequent flyer programs.
Under a code sharing agreement, the airline that administrates the flight (the one holding the operational permissions, airport slots and planning/controlling the flight and responsible for the ground handling services) is commonly called the operating carrier, often abbreviated OPE CXR, even though the IATA SSIM term "Administrating carrier" is more precise. The reason for this is that a third carrier may be involved, typically in the case that the airline originally planning to operate the flight needs to hire a subcontractor to operate the flight on their behalf (typically a wet lease, meaning an aircraft is leased with crew and all facilities to fly, commonly due to capacity limitations, technical problems etc.) In this case, the airline carrying the passenger should be designated the operating carrier, since it is the one carrying the passengers/cargo.
When a flight is sold under several designators and flight numbers as described above, the one published by the "Administrating carrier" is commonly called a "prime flight" (as opposed to a codeshare marketing flight).
Under a code sharing agreement, participating airlines can present a common flight number for several reasons, including:
There are several types of code sharing arrangements:
Much competition in the airline industry revolves around ticket sales (also known as "seat booking") strategies (revenue management, variable pricing, and geo-marketing). Criticism has been leveled against code sharing by consumer organizations and national departments of trade since it is claimed it is confusing and not transparent to passengers.
There are also code sharing arrangements between airlines and railway companies, formally known as air-rail alliances, and commonly marketed as "Rail & Fly" due to the popularity of the Deutsche Bahn codeshare with many airlines. They involve some integration of both types of transport, e.g., in finding the fastest connection and allowing the transfer between plane and train using a single ticket. This allows passengers to book a whole journey at the same time, often for a discounted price compared to separate tickets.