Information source: http://www.nytimes.com/2002/08/23/business/23AIR.html

Delta Air Lines, Continental Airlines and Northwest Airlines are expected to announce a partnership today that will allow them to book passengers on one another's flights on certain routes, according to people with knowledge of the discussions.

The partnership, known as a code-share alliance, will essentially allow the airlines to extend their route structures by proxy. Travelers will be able to fly part of a trip on one carrier and the rest of the trip on another if a single carrier does not cover the entire route. Passengers can choose which frequent-flier club will get the miles for the trip.

Airlines generally describe this as a marketing partnership, because they do not share revenue from the flights. Each carrier is paid only for its particular leg of the trip. But because the extended route structure attracts passengers who might otherwise have flown on a rival carrier, airlines generally record a rise in revenue because of a partnership.

Continental and Northwest, for example, already have a similar code-share arrangement, and each one receives an additional $200 million a year in revenue because of it, executives at the airlines have said.

The agreement among the three airlines will last 10 years, people with knowledge of the discussions said. The code-sharing deal will apply to some routes in the United States and to others in Asia, the Americas and Europe. Some foreign partners of the three airlines could also be involved.

Talks on the code-sharing agreement began in earnest about a month ago.

The three airlines declined yesterday to comment on the announcement, which is expected today.

"We are in talks," said Catherine Stengel, a spokeswoman for Delta, which is already part of the SkyTeam alliance that includes Air France, Alitalia and Korean Air, among others.

The Department of Transportation will have 30 days to review the arrangement to see if it hinders competition, although that period can be extended to six months.

United Airlines and US Airways reached a code-share agreement last month that is under review by the Transportation Department.

Leo F. Mullin, chief executive of Delta, the nation's third-largest airline, said at the time that he would seek a partnership of his own to fight the increased competition presented by a United-US Airways alliance.

Mr. Mullin said he had felt threatened by the alliance because US Airways, which filed for bankruptcy protection on Aug. 11, was Delta's biggest competitor on the East Coast.

One airline analyst, Michael Boyd in Evergreen, Colo., said the latest partnership "sounds like a home run."

"The Northwest and Continental alliance has been one typified by increased customer convenience and options, with no reduced competition," Mr. Boyd said. "Depending on how this is done, and I assume they'll do it in the same manner, everyone wins."

Facing losses that amounted to $1.4 billion in the second quarter, the major carriers have begun cutting costs while trying to figure out ways to generate revenue. Continental said on Tuesday that it was reducing capacity and would begin charging low-fare passengers for certain services. US Airways said on Wednesday that it was cutting 13 percent of its 1,550 daily mainline flights as an initial step in its restructuring.