Originally Posted by
thetravelabstract
I just assumed its a sunk cost in the partnership and there is nothing they get from an award flight booking.
HIGHLY unlikely. The airlines generally have direct bilateral agreements that define the remuneration for FF-related expenses, incluing lounge access, miles and redemptions.
Originally Posted by
thetravelabstract
I would think the real benefit is shared revenue for paid fares and shared costs between the airlines. It is a great way to expand your airlines reach without having to actually incur any of the added expenses of building out your business operations.
Yes and no. On routes where there is anti-trust immunity there is direct sharing amongst the involved carriers of costs and revenue, again per their contracts. On other routes they cannot collude on fares or inventory and would actually get in a lot of trouble if they did. There are codeshare agreements that stop short of the ATIs and there is the ability to publish a fare that includes carriage on other carriers wherein the selling carrier pays the operating carrier a set fee for the passenger.