Codeshare Revenue?


Dec 20, 2002
How will this impact the $200,000,000 of annual revenue that was to be gained from the codeshare? Will this impact the restructuring?
US Clears Air Codeshare with Conditions
Friday January 17, 12:35 pm ET
By John Crawley
WASHINGTON (Reuters) - The Bush administration said on Friday it would permit the largest ever U.S. airline marketing alliance to take effect, but imposed conditions.
After reviewing the proposal for nearly six months, the Transportation Department cleared the codeshare proposal by Northwest (NasdaqNM:NWAC - News), Delta (NYSE:DAL - News) and Continental (NYSE:CAL - News) airlines, a government source said.

But the source said the carriers must adhere to a series of conditions, which the official would not disclose.
We believe it is the decision that will most benefit consumers, the official said.
A formal announcement of the plan was expected later in the day.
Officials from Delta and Continental said the carriers were still waiting for word on the decision. Representatives from Northwest could not be reached for comment.
Regulators cleared a similar deal between bankrupt carriers United Airlines (NYSE:UAL - News) and US Airways (OTC BB:UAWGQ.OB - News) last year and imposed conditions on overlapping routes.
Codesharing agreements allow airlines to sell seats on each others'' flights, reducing costs. Rather than each running a flight half full, two could run a single flight near capacity, for example.
Under the plan, the three carriers would also expand their frequent flier and airport club programs.
Proponents said it will boost revenues at a time of unprecedented industry financial turmoil and give consumers more choices without diminishing competition.
Critics assert it will further concentrate the industry among the biggest domestic airlines and make it harder for new entrants and low-cost carriers to serve lucrative markets.


Aug 19, 2002
[BLOCKQUOTE][BR]----------------[BR]On 1/17/2003 2:08:21 PM a320av8r wrote:
[P]CO hubs IAH and DAL hubs DFW.[BR]Two fine TEXAS hubs.[BR]George II has no problems with this![BR][BR]Proud to have voted DEMOCRAT!!![/P]----------------[/BLOCKQUOTE]
[P][/P]You're forgetting that:[BR][BR]1) two other airlines have hubs in Texas,[BR][BR]2) the DL "hub" isn't much of a hub these days, and[BR][BR]3) certain airlines called US Airways and United have THREE hubs within about a 250 mile triangle.


Aug 21, 2002
Not to mention that the "two-Texas-hub" conspiracy doesn't square well with the often-postulated view that Bush will do whatever he can to protect AA. Maybe we can come up with an "Ohio conspiracy" since both DL and CO have hubs there. Or maybe a New York/New Jersey conspiracy due to CO's EWR hub and DL's operations at LGA and JFK.

The fact is that approving the US/UA codeshare put the government in a difficult position. NW and CO were already very happy with their existing codeshare, and Delta needed a dance partner. While the DL/NW/CO alliance is larger than US/UA, the existing NW/CO and standalone DL were both much smaller than US/UA.

Assuming this allows KL, NW, and CO (and CM?) to join SkyTeam, it certainly seems that Star Alliance and oneworld will be presented with a far more formidable competitor.


Dec 20, 2002
Still haven't heard!

How does this effect the restructuring? Will the ATSB (in their analysis) throw out the $200,000,000 (optimistic to start with) that was to be gained through the UAL codeshare? Will these two codeshare approvals have a negative net result for US?

Any thoughts?