Code share revenue terms?

[JayBrian]

From an article in TravelWeekly Oct. 14, 2002;
Under the terms of their own alliance agreement, United and US Airways will not be sharing revenue from the code-share flights.
Instead, all the fares paid by the passengers on the flight will go to the carrier operating the flight, no matter which airline''s code is used.
That helped the carriers cause with the DOT. In making its decision, The DOT said that the provision should give each airline an incentive to compete with its partner by operating its own flight, as it will get the passenger revenue only when it is the operating carrier.
Can anyone decipher this?
Jay

 

[N628AU]

JayBrian,

This means it does not matter which code the passenger is riding on that leg. If the passenger is going CLT-EUG for example, taking a flight operated by US Airways CLT-SFO (regardless if the ticket code is the US flight or UA codeshare flight number), and then UA SFO-EUG, US gets the revenue for the CLT-SFO leg (the majority of the fare), and UA gets the SFO-EUG portion. This provides incentive for both carriers to operate long-haul, and use the codeshare to provide addtional feed on US shorthaul east cost and Carribean, and UA short haul west coast and Pacific Region.

 

[chipmunn]

N628AU, your comments are accurate and you bring up a valid point. The alliance encourages US to grow its long-haul and not become a feeder for UA. US gets the greatest amount of alliance revenue the more miles that are flown by a code share passenger on its own aircraft.

Chip

 

[oldiebutgoody]

Is there any chance of US becoming a full fledged member of the STAR alliance? I wonder what the requirements are for that?

 

[TomBascom]

How are award tickets handled? If I redeem US miles to take an award on UA does US reimburse UA at some rate? (and vice versa of course...) If so how is that rate determined?

 

[chipmunn]

Oldiebutgoody:

US has been offered an offical invitation to join the Star alliance and the company has accepted the offer. Because of the compelxity of implementing the domestic alliance, the international alliance will not begin for about one year.

Chip