Evils of Codesharing– Why Insist that Your Product Is a Commodity?

Many (most?) blogs are more a collection of rants than useful information. I have tried hard to avoid that. However, a recent experience requires a rant, and may provide useful information as well.

Back in December, I got bumped from a flight (voluntarily). Last month, I used the voucher from that experience to purchase a new ticket. The new fare was more than the value of the voucher, so I put in my credit card information on the airline’s website to pay for the difference. I got a message saying that my purchase was confirmed. Last week, about to rush off to the airport, I went back to the website to print boarding passes. Reservation not found. After 15 minutes talking to computers, I spend 15 minutes talking to a friendly person who is unable to help me, but who does transfer me to someone on the website support team who does. After we got over the comedy of her asking me to fax the confirmation information to her as I was driving to the airport (I had already provided the confirmation number), she investigated and tells me that I can’t use vouchers because one of my flight segments is a code share with another airline. Why didn’t the website say that when I booked the flight? Perhaps someone forgot to tell the engineers. The reservations agent did right be me, allowing me to book the flight at the original fare. It certainly caused a lot of stress and for someone who flies infrequently, it probably would have killed the trip.

Codesharing allows airlines to make their networks seems bigger than they are, by allowing one airline to effectively market and sell seats on another carrier’s flights. This is particularly useful in international situations which may require complex regulatory approvals for access rights. Domestically, it’s generally just confusing. (From a pricing perspective, it seems that in some situations codesharing increases pricing power, while in others, consumers enjoy lower prices. See this paper for more details than you ever wanted.)

Allowing customers to put together itineraries that span multiple carriers is a good thing. It adds value to the system, giving consumers something, which in theory should also increase profits if value capture is effective. The problem with its implementation is that it insists that air travel is a commodity. Of course it is, but why not try to change that instead of agreeing wholeheartedly? While many companies sell products under their brand that someone else actually builds, the airlines take it a bit further than most. Microsoft doesn’t make the Xbox– Flextronics does. But Sony doesn’t sell something they call a PlayStation that is actually an Xbox. Nor do they let you purchase a gift certificate for sony.com that will let you buy anything except that pseudo-Xbox (nor tell you that you bought it but not actually record the order).

Good luck to the airlines and their travelers. I don’t think codesharing is going away, I just hope someone tells the programmers what message to send when someone tries to use a voucher to buy a codeshare flight.