Unexplainable codeshare airfares
 

Well here's one I cannot fathom.

Last week I priced a flight from Florida to Missouri using the CO website. Best fare for the times I needed was $284.

Went to the NW site to see what they had. NW showed the same flights on CO metal with codeshare numbers. Priced at $244.

So NW was selling seats on CO metal for less than CO was selling its own seats.

Now I know that airfares often don't make sense, but how in heck can this be? How can an airline sell flights on a competitor's planes for less than the company flying the planes?

'splain that one to me. http://www.flyertalk.com/forum/redface.gif)

Could be one of a thousand things. Like, maybe more cheap seats became available or a seat sale started or NW Everyday Deals was applicable, etc. Maybe CO cheapest category of seat was gone and NW wasn't. There are literally thousands of fares loaded/ changed/updated daily, so there is always bound to be some differences from one week to the next.

This fairly often happens.

For one thing, the airlines charge each other a lot less for seats than they charge us. Some times with codeshares, the ticketing airline signs up for a certain number of seats and they may not be selling as well as expected.

The other thing is that often most of the options offered with a promotional fare may be on the ticketing airline's metal, but they throw in code share flights as well to keep things more simple.

This worked out very well for me one time. I bought a NW codeshare flight on CO metal to Philadelphia, which has no Presidents Club. I have an American Express Platinum card which allows me to use Presidents clubs when I am on Continental and World Clubs when I am on NW. But, for some strange reason, you cannot use World Club when you are on CO or PC when you are on NW. But, a NW codesahre ticket is good enought to get you into WC.

The airlines do many other strange things. One of the best ways from Houston to Teipai is IAH to Tokyo and Tokyo to Teipai on NW. Yet, this connection never shows up on either's website. You have to build it yourself or talk to an agent.

What's amazing is that if the prices for codeshares were always exactly the same, people would be screaming "price fixing!" as this could of course only be done with coordination between the carriers. In fact, this is the reason that fares are often not the same on codeshares. The airlines are prohibited from working together to keep prices on codeshares the same.

While it is true that they sometimes move seemingly in lockstep, this is accomplished by one airline responding to another's changes in their published fares. Whether this occurs or not probably has very little, if anything to do with codesharing, and everything to do with what each airline's pricing model tells them is the best thing to do.

I've brought up this issue before and the consensus was the "antitrust factor."

Don't forget that CO and NW have valid routings for published fares. I'm making this up, but say NW EWR-LAX might include routings via MEM, DTW, MSP + CLE and IAH. Then, assuming that the fare class is available, it would be the same price going on NW metal via DTW as a NW code-share on CO metal.

The situation that I came across was quite a bit different, it involved HP. Long story, but it involved fare rules and minimum stay requirements.

Replying to Steve M and EWR-COflyer.... Your points (identical fares raising anti-trust concerns, and same fares for different routings to same destination) are appreciated. But those were not elements that applied to my question.

I was wondering how NW could sell tickets on CO's planes for *less* (in this case 15.5% less) than CO was selling its own seats on the identical flight.

'splain that to me, please.

because NW's published fare for the route is 15.5% less than CO... simple as that...

I don't know what your route it, but let's say it is TPA to STL, here's the NW valid routing for a (K) fare, their lowest:

so, you can see, assuming the fare class is available, you could fly from TPA on NW metal thru DTW or MEM, or on CO metal thru EWR, IAH or CLE for the same price.

This topic comes up occasionally. The fare differences can be hundreds of dollars. In EWR, its not unusual for NW flights on CO metal to be cheaper, sometimes by a lot. In other cities, members report just the opposite. All it means is that one must always check the other carrier before purcahsing a NW or CO ticket. Sometimes the differences are astronomical.

However, this is a very key point in the NW-CO agreement. Neither carrier is permitted to sell seats on non-stop codeshare flights that originate or terminate in the other carrier's hub cities (defined as DTW, MSP, MEM for NW and EWR, IAH, CLE for CO). Hence, if you are flying EWR-BOS, you have to fly on a CO code if you want a nonstop, since NW cannot sell that ticket. They can however sell something like RDU-EWR-BOS on the same plane.

True. And the NW fare is likely to be hundreds of dollars cheaper with the one stop/change. The one that always sticks out is EWR-ORD. NW by way of DTW is always a lot cheaper. It just depends on who is paying for the ticket. http://www.flyertalk.com/forum/smile.gif
For instance, EWR-ORD tomorrow on CO and returning Monday is $473RT (I know this doesn't mak sense for a non-Sat nite stay). The same trip on NW, thru DTW is $301.
The joys of airline pricing. http://www.flyertalk.com/forum/smile.gif

[This message has been edited by Vulcan (edited 07-06-2002).]

I'm sorry if I (we) have not been clear in our explanantions. The price NW pays for the seats is probably substantially less than the cheapest fare that CO charges retail customers. It might be closer to what CO charges consolidators.

In your case above, the cheapest CO fare was $284. Let's just make up a wholesale price from CO to NW of $150. I have no inside knowledge to know what the actual price is, but it is certainly much less than the $284 fare. So, all this situation says is that NW is willing to mark up the $150 wholesale fare to $244, but CO wants at least $284, at that moment in time for that particular flight. Not particularly earth-shattering, once you realize that codesharing is more than one airline simply purchasing tickets at retail from another carrier and marking them up.

To add further to the previoous discussion on codeshare pricing, there are basically two models: "hardblocks" and the other kind (which I don't know the name of). The NW/CO codeshare agreement is the other kind. That is, although there is some wholesale pricing model, there's no specific commitment by either airline to buy a certain number of seats on any particular flight. There may very well be an overall annual requirement, and perhaps a per-flight maximum, but no minimum per se.

The codeshares with VS (and AF when they existed) were "hardblocks." In those cases, CO purchases a certain number of seats in each cabin on each flight in advance. These are theirs to deal with as they like. As a result, they may decide to sell a seat at less than their cost if at the last minute it looks like it might go out empty - this could never happen with the CO/NW codeshares, as they only buy the seats they need from each other. Plus, CO can unilaterally decide issues of upgrades on VS flights, as they are upgrading you to seats they've already purchased.

Thank you, Steve M. This additional clarification was very informative. :o)


[This message has been edited by socref (edited 07-07-2002).]