International Joint Marketing Takes to the Air

Can flights between New York and Los Angeles, and Seattle to Chicago, be considered international rather than domestic trips? And can the new no-smoking rules on domestic flights of less than two hours apply to certain “international” segments?

The answer to both questions is yes when an international airline teams with a U.S. carrier for flights within the United States under some new forms of code sharing between the carriers. Airlines use codes (two-letter abbreviations such as UA for United and AA for American) for identification.

Code sharing between airlines, commonplace between major and regional carriers in the United States, has become more of an international proposition lately, with clear signs that this kind of joint marketing is going to grow, with a new set of implications for travelers.

Under code sharing in the United States a smaller airline uses the code of a larger airline on the passenger ticket, an advantage in drawing traffic. But the practice led to a good deal of passenger confusion.

Travelers mistakenly believed that they would fly the larger airline for an entire flight because of the use of the major airline’s code, only belatedly discovering that flight segments might be on a different and smaller plane. Passengers could go from a large jet to planes carrying fewer than 20 passengers.

Different Safety Rules

The number of passengers a plane carries is important, as there are different and less-stringent safety rules for aircraft carrying 20 or fewer people than for larger jets.

Another problem travelers sometimes faced was finding and getting to the right gate on time for the connecting flight with the smaller airline, particularly at airports with several concourses.

Accordingly, the Department of Transportation made new rules several years ago mandating that airlines tell passengers at the time of booking if any part of their flight will be on a different airline than the one whose code is shown on the ticket. But the carrier isn’t obligated to tell you the size of the other plane, which is a question worth asking.

Foreign airlines are increasingly seeking ways to tap the U.S. market and share codes with a U.S. airline when permitted by the DOT, which allows them to gain traffic from many points in the United States without operating their own jets. Meanwhile, the American carrier can gain greater recognition in overseas markets it doesn’t serve.

International Regulations

“Even though the domestic segments are flown by U.S. carriers such as United or American, they are considered international flights, and the foreign airline is responsible to travelers for refunds and the other aspects of airline responsibility to consumers,” a DOT spokesman said.

Baggage rules are applied on an international rather than domestic basis, the DOT spokesman added. Therefore, passengers could get a maximum of $9.07 per pound ($20 per kilo) on lost or damaged checked-through luggage instead of the domestic rule providing for a maximum payment of $1,250 per passenger.

Overbooking and denied-boarding compensation on domestic segments of international flights continue under the same rules, the DOT spokesman said. Similarly, airlines have to disclose at the time of sale if the flight will be on a different carrier than indicated by the code shown on the ticket.

As for smoking on the U.S. segments, the DOT spokesman said: “If the flight in the United States is under two hours, the no-smoking rule applies.”

London Connection

One example of such a new code-sharing agreement is a marketing tie-in between United Airlines and British Airways. The two carriers have been granted authority by the DOT for United to display the British Airways code on its Seattle-Chicago flights connecting to British Airways’ Chicago-London flights.

American and Qantas have an agreement whereby American can use the Australian carrier’s code on New York-Los Angeles/San Francisco flights connecting to Qantas’ flights from the West Coast to the South Pacific.

Sharing codes in this way enables the carriers to offer these domestic segments as parts of longer flights, which means higher placement on the computer reservations screens used by travel agents. As a rule, the quicker a flight appears on the screen, the faster it sells.

Thus far it appears that the DOT is only approving these code-sharing agreements when the foreign airline already has rights to the U.S. gateway. Qantas, for example, has the authority to serve New York City.

Not everyone is happy with the DOT approval of such agreements. Critics argue that they violate or skirt the rule of cabotage, which prohibits foreign airlines from carrying traffic strictly within the United States.

Basic Benefits

Passengers get three benefits through such code-sharing agreements, Jake Warren, vice president/Western Region for British Airways, said:

“First, travelers may get a lower through-fare than they would buying separate flight segments. They get boarding passes for both Seattle-Chicago and Chicago-London flights and any continuing flights on British Airways. And they also have more ease in connections in both directions.”

Under the British Airways-United arrangement the carriers are sharing a terminal at O’Hare Airport in Chicago, making connections easier. Scheduling flights to improve connecting times is another byproduct of joint marketing programs.

“We treat passengers flying on these flights under Qantas’ rules and in every way as if they are Qantas passengers,” Wes Kadahl, senior vice president/international for American Airlines, said. “We try to handle these flights as a single carrier service.”

These agreements between the carriers are part of the increasing globalization of the travel industry.

Many marketing arrangements have already begun that involve the integration of schedules and operations as well as participation in frequent-flier plans and cooperative advertising and promotional activities. You can expect to see more joint marketing between airlines, hotels, car rental companies and cruise lines.

In each case, travelers should find out who is offering the service and who is responsible to them for any problems connected to the service or lack of it.