If you’re looking to maximize the value of your travel dollar and get the most from your airline frequent flier programs, understanding the concepts of airline alliances and codeshares are crucial. Essentially, airline alliances are brand partnerships that overcome geographic hurdles of operating an airline in terms of maintaining loyalty.
Airline Alliances Overview
Airlines within an alliance are brand partners. They allow you to earn and redeem frequent flier rewards with partners and will operate one another’s flights. In most cases, a passenger’s status will carry over as well between airlines. The benefit to you, the passenger, are more seamless itineraries as well as lower prices. The advantage to the airline is that they don’t have to worry about losing your loyalty to a competitor because their geographic footprint does not extend that far. What does this mean? To understand the motivation behind airline alliances, we need first to understand the airline operating model.
Airline Operating Model
Most airlines operate using a hub and spoke configuration. The hub and spoke configuration is the most significant motivator behind alliances. A hub and spoke configuration means that they have one or several airports that serve as hubs or focus cities. Hubs have the highest traffic while focus cities are airports where airlines are looking to gain a more significant share of the market. For this post, we will refer to them collectively as hubs.
All of their flights must depart from or arrive at one of these hubs, aside from Fifth Freedom Flights. These are irrelevant to the conversation so that we won’t go into these any further and when the term “all flights” is used, assume that it excludes these flights. It’s also important to note that many low-cost carriers operate using a point-to-point model. These airlines will still have hubs; however, not all flights have to go through a hub necessarily. Low-cost carriers are generally not part of airline alliances so that we can exclude them from this discussion as well.
For national airlines and airlines that brand themselves as belonging to a country, these hubs are within that country. For example, German national flag carrier airline Lufthansa has its biggest hubs at Frankfurt International Airport (FRA) and Munich International Airport (MUC). What this means is that all flights must go through these two airports. Lufthansa will not operate a flight, for example, from Chicago to Seattle.
Brand Loyalty Beyond Borders
What does this operating model do to motivate airlines to join airline alliances? Let’s look at an example that may illustrate this better. The example passenger is from Germany, and she is looking to take a trip to the United States. She is from Munich and is looking to visit Chicago, Seattle, and New York on this trip. Because she is from Munich, she has a Lufthansa Miles and More frequent flier account. Also, let’s say she has Gold Status with Lufthansa. Her frequent flier account with Lufthansa allows her to earn frequent flier miles on her flight from Munich to Chicago.
However, as we mentioned above, Lufthansa will not fly from Chicago to Seattle because it is a German airline with hubs in Germany. All Lufthansa flights will have to fly through their German hubs. Therefore, she can’t choose to fly Lufthansa and earn Lufthansa miles. However, luckily for her, Lufthansa is a part of Star Alliance, the oldest and largest airline alliance. One of the other airlines in Star Alliance is United Airlines, which happens to be headquartered in Chicago and uses Chicago O’Hare International Airport (ORD) as a hub. Therefore, by flying from O’Hare to Seattle-Tacoma International Airport (SEA) on United Airlines, she can still earn Lufthansa miles and get access to the United Club with her Lufthansa status.
On her final leg to get from Seattle to New York, she could choose to fly United again to Newark Liberty International Airport (EWR). Newark Liberty International Airport is located just a few miles outside of Manhattan, as Newark is another United hub. Going back to Munich, she has the option of flying Lufthansa or United and can choose whichever is cheaper. And finally, she can make this all one itinerary, saving her even more money, time, and hassle.
Based on this example, you can see four significant benefits to the traveler. They are the ability to:
- Earn and use frequent flyer rewards on other airlines within the alliance.
- Choose which airline has the cheapest fare on a given route where more than one airline in that alliance operates flights.
- Combine what would be a disjointed itinerary into one relatively smooth route.
- Transfer status and benefits between partners.
As part of these airline alliances, partners will often codeshare flights with one another. What exactly does that mean? It means that when an airline operates a flight, its partner airlines will provide a flight number so that they can also sell the flight under their name.
For example, our German passenger probably booked this entire itinerary through Lufthansa. For the legs from Chicago to Seattle and Seattle to Newark, even though United operated them, Lufthansa could market these as their flights due to codesharing agreements. As a result, they provided Lufthansa flight numbers for these United flight numbers.
For the Chicago to Seattle flight, for example, let’s say she took flight UA 1641. United operates this flight. However, what she probably saw on her end while booking was LH 7504, which was the Lufthansa codeshare number for this flight. When at the airport, she should be aware of the United flight number, but often the codeshare numbers are provided as well for reference.
Airline Alliances, Codesharing, and Your Strategy
Now that you have an in-depth understanding of how airline alliances and codesharing work, you can see how these are beneficial to your travel strategy. The four benefits above can save you money, time, and hassle in traveling. As a result, it’s essential to understand how they work so you can maximize the benefits they offer.