whlinder

Correct. So how much do they have to pay when you take that flight on UA?

I think I misinterpreted your post I was replying to, I took it to mean you thought US would pay UA the taxes (since the fare was so low) and US would still be out additional taxes to the gov't. I see now you meant that if people fly, US actually has to turn the taxes over.

johnep1

I don't know how much US would have to pay US for each seg. However, since it was sold as a codeshare, UA was allowing US to sell seats on UA metal for whatever US wanted to charge. However, the amount US chooses to charge does not change the amount US needs to pay UA for the seat. That's why you can sometimes book the UA codeshare on a US flight DCA-LGA for $150 when US was asking $500 for the same flights and sometimes the amounts are reversed (US asking $150 and UA asking $500 for the same US flights). Basically, each airline tries to get the most they can for the seat. If that's more than they need to pay the airline whose plane the seat is on, then the ticketing airline keeps the difference.

In this case, I doubt that the amount US has to reimburse UA for the segments on UA metal is less than whatever portion of the $1.86 fare the UA flights come out to.

While I think I know how codesharing works, I don't know all the numbers. But even if US has to pay UA $100 for each F seat booked on UA metal (which is reasonable as these seats go for >$1000 rt), US will be paying UA $600 for my 3 F tickets alone (which cost me $66 each, of which only $22 goes to US as the base fare). So US gets $66 of revenue and has to pay UA $600 (and operate the other segments of the ticket that are on US metal). The amount US would have to pay UA for each F seat booked would need to be less than $10 (it could certainly be less than the $100 amount used above, but I doubt it's anywhere close to $10) for US to not lose money purely from the codesharing aspect (and then US has to pay for any miles earned in other programs).

whlinder

It all depends on how UA and US have their codeshare contract set up and their procedure for interline billing. From everything that I know, they use standard ACH rules to split the ticket value, and thus UA can only bill US for its proper portion of the $1.86.

Now US might have offered an olive branch since it was their error and agreed to pay regular prorate amounts, but they are under no obligation to do so as the fares are guaranteed.