Take care when buying code-share

Code-sharing, which allows a passenger to purchase a ticket through one airline for a flight operated by another carrier, is a very common practice in the airline industry. There are benefits, but there is a potential pitfall that travelers should know about.

One of the benefits of code-sharing is mileage accrual. For example, a member of American Airlines (NASDAQ:AAL) AAdvantage Mileage Program who wants to accrue his or her miles in that frequent flier program might be able to book a flight on another airline through American Airlines and earn AAdvantage miles if they have a code-share agreement.

Among the drawbacks is pricing inequality. Given the airline industry’s almost-indecipherable pricing schemes, it will come as no surprise that prices for the same code-share flight can vary pretty dramatically. Case in point: a flight from Los Angeles International Airport (LAX) to Nadi International Airport (NAN) on the western side of Fiji’s main island Viti Levu.

A search on Travelocity.com returned three non-stop flights that initially appeared to be on three different airlines. But upon closer examination, it turned out all three flights were operated by Fiji Airways and offered through code-share partners. Not particularly surprising. But what was surprising was that there were different prices for the flight on the same airline and aircraft.

Screenshot of Travelocity.com price comparison, LAX to Fiji
Screenshot of Travelocity.com price comparison
Click to view larger size
For the flight during U.S. Thanksgiving week, a traveler would get the lowest ticket price by booking directly with the operator, Fiji Airways, or through Qantas Airways. Both offered passage at US$1,745.46. Booking through American, however, would cost more: US$1,926.76, more than $180 higher than booking directly with Fiji Airways.

Reasons for the disparity vary. When flying on a carrier based outside the U.S., a modest difference could be explained by periodic adjustments in the currency exchange rate. But other factors also come into play.

Under code-share agreements, partner airlines often have access to a limited number of seats and can price them independently, so the law of supply and demand enters the picture. If there is little demand through the code-share partner, the price could be lower. The converse is also true: if demand is higher, the price could be as well.

A spot-check of 240 different flights conducted by The Wall Street Journal in 2014 found that, in most cases, the airline that actually operated the flight offered the lowest price. But not always, so it pays to do some research through sites like Travelocity.com, Kayak or others that show prices for several airlines. As shown on the graphic, code-share flights are identified by a note below the name of the airline that will read, “Qantas Airways 3838 operated by Fiji Airways” or something similar.

Other disadvantages of booking a code-share flight center on seating.

When purchasing a code-share flight on Airline A through the website of Airline B, travelers may not be able to select their preferred seats at the time they make the reservation. It may be a simple matter of calling or going online with the airline operating the flight once the reservation confirmation number is issued, but it could also be much more complicated.

Last year, I booked a flight on Airline B through Airline A’s website but was unable to reserve my seats through Airline A. When I went to Airline B’s website after I received my confirmation number, only then did I learn that there would be a fairly significant fee for reserving my seats more than 24 hours before my flights. Because it was a long-haul overseas trip, I was not willing to roll the dice and risk getting stuck in a middle seat for the 10-1/2 hour flight. Ultimately, I cancelled the reservation and booked the trip on another carrier.

Frequent travelers may also find they have given up the possibility of a complimentary upgrade when they fly a code-share flight. Even though they may earn miles for the flight itself, reciprocal privileges often do not include the opportunity to be seated in a higher class cabin, even for top-tier members of other airlines' frequent flier plans.

The take-home message is to do the homework. Identify the lowest price, take into consideration the other factors that are important to you, and decide whether the money you might save is worth whatever you may have to forego.

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