Airline Network Planning and Scheduling

10Partnership Agreements

10.1 Introduction

Several options are available to airlines to increase demand and expand its network coverage domestically and internationally through partnership agreements. For example, an airline can extend its network by establishing operational partnerships with regional airlines that can serve small markets to feed the mainline airline. An airline also could engage in a code‐share agreement (code‐sharing) with another airline. Code‐sharing is a capacity purchase agreement in which an airline can sell tickets on some pre‐identified flights of its code‐share partner airline. Airlines can also participate in an alliance that includes several airlines. An airline alliance is an arrangement between two or more airlines to cooperate on different aspects including code‐share agreements. An alliance typically works as a global airline to facilitate inter‐airline connections worldwide. Another important aspect of how airlines can boost their sales and market penetration is through expanding ticket distribution channels. Airline managers should understand how the different itineraries designed by their network planning teams are competing in the different ticket distribution channels. They should examine the trade‐off between using distribution channels that are characterized with large market, expensive fees, and high competition among subscribed airlines (e.g. Expedia and Orbitz) versus distribution channels with small market, less expensive, and low/no ...