Revenue split between KL/AF and DL
Aug 31, 2021, 5:15 pm
#1
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Revenue split between KL/AF and DL
Do DL/KL/AF split all revenue/profits in half on flights to/from the US?
If not, how do they decide how to split?
I typically purchase my flights via KL or AF, with KL/AF codes, with both European and TATL legs operated by either KL/AF, and a US flight on DL (with KL/AF codes).
In those instances, would Delta receive smaller share, or does it really not matter who’s marketing or operating, because they share everything equally?
If not, how do they decide how to split?
I typically purchase my flights via KL or AF, with KL/AF codes, with both European and TATL legs operated by either KL/AF, and a US flight on DL (with KL/AF codes).
In those instances, would Delta receive smaller share, or does it really not matter who’s marketing or operating, because they share everything equally?
Aug 31, 2021, 5:21 pm
#2
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AFAIK the JV is supposed to be revenue neutral for the TATL flights. However, they would also need to allocate revenue between the domestic, TATL, and intraEU (etc.) segments. I don't know whether fare and carrier imposed fees would be treated differently for this purpose. Taxes, security and customs.fees, and airport facility fees would go to the government that imposed them.
Aug 31, 2021, 6:23 pm
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Aug 31, 2021, 6:29 pm
#6
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The exact details of these joint business agreements are trade secrets. Generally, the airlines split revenue according to how many seats each airline puts into the covered market.
It's theorized that the marketing airline for each flight gets a commission for bringing the business in. If you take a short haul connecting flight (e.g. ATL-BOS connecting to BOS-AMS), the short haul airline is paid a less than industry average rate for that flight because of the joint business revenue split.
The two transatlantic joint businesses that Delta participates in (DL/AF/KL and DL/VS) were merged last year -- Alitalia was kicked out in the process, which might have been a good choice.
It's theorized that the marketing airline for each flight gets a commission for bringing the business in. If you take a short haul connecting flight (e.g. ATL-BOS connecting to BOS-AMS), the short haul airline is paid a less than industry average rate for that flight because of the joint business revenue split.
The two transatlantic joint businesses that Delta participates in (DL/AF/KL and DL/VS) were merged last year -- Alitalia was kicked out in the process, which might have been a good choice.
Aug 31, 2021, 8:38 pm
#7
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In general, the money first goes to the ticket prefix carrier (006 or 057 or 074) , then the actual revenue goes to the operating carrier once pax actually flown the flight. The whole ticket price is divided by segments proportionally to individual operating carrier.
Aug 31, 2021, 9:05 pm
#8
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This is how works outside a JV. In JV carriers split rev/exp regardless of operating carrier.
Sep 1, 2021, 12:26 am
#9
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How do the airlines work out the differences then?
Some passengers may choose one airline over another to purchase and fly flights, and they do it with full intention.
For instance, they may choose AF (AF codes and operated flights) over KL or DL, because of wine and service. Others, may choose DL because of loyalty to them.
Is there no way these passengers can reward the airline of choice? Or, upon purchasing flights, they reward the whole group?
Some passengers may choose one airline over another to purchase and fly flights, and they do it with full intention.
For instance, they may choose AF (AF codes and operated flights) over KL or DL, because of wine and service. Others, may choose DL because of loyalty to them.
Is there no way these passengers can reward the airline of choice? Or, upon purchasing flights, they reward the whole group?
Sep 1, 2021, 2:48 am
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Sep 1, 2021, 6:58 am
#11
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If I was sketching out the JV details on a napkin, I’d exclude F entirely from the JV and treat any onward DL metal flights in the US as standard non-JV codeshares.
EDIT: Also any DL TATL connecting onto F at CDG, but then maybe that starts overly complicating things?
EDIT: Also any DL TATL connecting onto F at CDG, but then maybe that starts overly complicating things?
Sep 1, 2021, 7:16 am
#12
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Poster was referring to the fact that AF still has F cabins on some long-haul equipment. I doubt these fares are significant enough to be treated separately. The vast majority of TATL tickets have a single fare component in each direction and the domestic US legs and intra-Europe legs are not broken out separately in terms of price. I very much doubt they get into the details of trying to price/cost out the individual legs involved in an international trip.
Sep 1, 2021, 8:53 am
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Poster was referring to the fact that AF still has F cabins on some long-haul equipment. I doubt these fares are significant enough to be treated separately. The vast majority of TATL tickets have a single fare component in each direction and the domestic US legs and intra-Europe legs are not broken out separately in terms of price. I very much doubt they get into the details of trying to price/cost out the individual legs involved in an international trip.
Sep 1, 2021, 1:41 pm
#14
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Don't forget that the point of these JVs is also to reduce competition across the Atlantic, which is roughly down to three main competitors. Squabbling over revenue for a shorthaul connection should be inconsequential relative to the overall increase in airfares due to lack of alternatives.
Sep 1, 2021, 3:59 pm
#15
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Don't forget that the point of these JVs is also to reduce competition across the Atlantic, which is roughly down to three main competitors. Squabbling over revenue for a shorthaul connection should be inconsequential relative to the overall increase in airfares due to lack of alternatives.