Partnerships & Codesharing - Unravel the Confusion Please

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Partnerships & Codesharing - Unravel the Confusion Please

Post by Cat » Tue Jul 21, 2020 5:58 pm

I am researching information on partnerships and codesharing to make yet another tutorial video for new participants and it seems that accurate, up-to-date information is difficult to find.

This is what I "assume" is fact and if you notice I have far more questions than facts and those facts could be far off the mark:

Partnerships between airlines will add additional revenue only if one airline is operating that route. If both airlines operate the same route, then both airlines in the partnership will actually see a 10% decrease in revenue. Is this statement accurate?

The airline owning the route collects a percentage when partner airlines fly it. That percentage is _____ ??
How does that income show in the host airline's finances, especially if the host airline is using Advanced Finances with Fleet financing enabled?

How can a pilot from Airline B fly Airline A's route with his aircraft if that aircraft is not in Airline A's route system?
Which leads to the question, how can Airline A add the aircraft Airline B wants to use if Airline A does not own one?
OR does the pilot from Airline B have to fly Airline A's aircraft? If so, how does the pilot get a type rating for an aircraft Airline B does not own?

Does Airline A get any percentage of Airline B's package cargo income or is the percentage a flat percentage off the flight's bottom line?
and finally, can Airline B access stored packages in Airline A's warehouses when loading a codeshared flight?
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Re: Partnerships & Codesharing - Unravel the Confusion Please

Post by joefremont » Tue Jul 21, 2020 9:57 pm

Well I have a bit of egg on my face. I just checked the code and over the course of years and many revisions to the booking formulas, somehow the codeshare bonus got dropped from the formula. I went and checked some very old code and saw that at one time, if you had a partner and no conflict in that route, the available passengers based on all the other formulas would increase by 10%. I am very tempted to just put that back but since we are discussing it we have a chance to change it. how do we think it should work?

All partners are not created equal, looking at real world airlines, if your partner was British Airways, that would be worth a lot, if it was podunk island hoppers with there two C208's, not so much. Maybe the bonus should be based on how many flights the partner has flown in the last 30 days. Should there be a negative for conflicts?

Edit: Moving topic out of tricks and tips and into New features & ideas.
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Re: Partnerships & Codesharing - Unravel the Confusion Please

Post by Cat » Wed Jul 22, 2020 1:24 am

However it's done, my suggestion is to Keep It Simple as possible. I am going to have to try to explain it all in my next video. :lol:

I voiced my concerns above..... which does not make it "simple" :shock:

One feature I did think of is in the host airlines flight routes, you might have a check box for codeshare (checked is yes). This would then allow airlines to share specific routes and not their entire route system where conflicts might occur. Or they could just "select all" to Codeshare.

If we ignore my very own suggestion of keeping it simple, we could then have a dropdown box of available partnerships that have been accepted to assign those checked routes to. So your big British VA might want to codeshare out it's Virgin Island hops to Local208 but then codeshare out it's New Zealand routes to NZAir as it were. The only downside to all this is I don't see any advantage for the little guy in this arrangement other than they don't have to make the routes themselves. So the payoff would have to be greater than if they just made the route and flew it themselves without codesharing with anyone.

Instead of using pax count, with today's big package cargo market, I would just take 10% off their bottom line for the host airline, but the small guy take should be 10% greater than if they did not have a partner. Am I making any sense at all? In other words the total value of the codeshared route would be 20% greater than if an airline flew it without a partner. AND I would limit each flight route to one codeshare partner, no real airline would want to have grudgematch competition and market share bickering by having two regionals contracted for the same route.

So much for KIS rolling on the floor laughing..... :roll:

OH and one more thing, the multiplier would need to be a fixed number. (standard 25x comes to mind). This will keep some podunk airline from
piggybacking on an established airline and turning millions with 700x flying 208's. And it will keep the cheaters (always have to guard against them) from setting up new airline after new airline with a gold and making billions at 700x multiplier as they game the system with codesharing.
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Re: Partnerships & Codesharing - Unravel the Confusion Please

Post by Cat » Wed Jul 22, 2020 1:39 am

In looking through very old posts, it seems the original simple system was this: If I have an airline in the USA and want to fly in Australia and there is an Australian airline that wants to fly in the USA, we would partner up and codeshare all of our routes so we don't have to go through the hassles of making all those routes ourselves.

10% bonus for codesharing and -10% penalty if both airlines have the same routes. That's how it used to work as far as I can tell.
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Re: Partnerships & Codesharing - Unravel the Confusion Please

Post by joefremont » Wed Jul 22, 2020 7:15 pm

Just some ideas on coming up with a new formula.

The ratio of flights between the two airlines should be taken into account, so if let's say the max partner bonus is 10% but the other partner has less than 10% the flights of your VA then maybe that caps the bonus.

The reputation of the other airline should probably also be a factor. Any airline with a reputation of less than 80 should probably be a negative influence. A form of guilt by association.

We would probably just add whatever bonus/reduction to the VA's reputation factor when calculating how many passengers what to fly.

For packages, code sharing is not really a factor, even reputation is not a factor, maybe it should be but that is a different topic. I think the best thing we could do for partners is allow pilots to transfer packages from aircraft and warehouses of partner VA's as long as the package has been moved at least once by the partner.
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Re: Partnerships & Codesharing - Unravel the Confusion Please

Post by Cat » Thu Jul 23, 2020 3:51 am

With so many cargo only planes out there now, how do you plan to have those codeshare? There are no pax counts to increase or decrease.

So after much thought on a way to try to keep things as simple as possible, this is what I came up with. It is just an idea to toss around, my feelings will not get hurt when you shoot holes in it that I cannot see.

Top Tier (120 rep) Host Airline accepts a partnership from say an young start up airline with a rep of 80.
Now when the airlines book each others' flights, the system takes the AVERAGE of both ratings so at this point it would be 100. So they may not get a full airplane based on ticket prices and other market share factors because their average rating is now below top tier.

The start up airline flies the flight. They get a 10% bonus pre multiplier and the host airline gets a 10% flight bonus x their multiplier.
So the flight, if full will make much more for the start up than if they made their own competing route. Incentive #1
The Host Airline gets money for doing nothing other than allowing the partner to fly their route. Incentive #2

Now lets say the start up airline makes that same route in their own route system and books it. Now the system reads duplicate route and applies a 20% penalty instead of a 20% bonus. The host airline gets paid less and the airline flying really takes the brunt of this penalty as they should know if they have the same route or not.

The main feature of this system is it promotes teamwork between airlines as codeshared flights will make more money than competing flights, much like package cargo makes more than generic cargo. Incentive #3

The most difficult part of this for Joe that I can see would be the averaging of the airline reps the moment the flight is booked. Of course if the pilot has a bad rep that will also affect to some degree the amount of pax/cargo willing to fly with that pilot.

Here is another factor to consider: the pilot flying the route crashes and logs it to the official record. That airline gets a big negative number PLUS 10% x their multiplier - and the host airline gets a bill to their home fleet for 10% of the pre multiplier negative number X their multiplier.

It would be very much like the real world.. yeah you may be working for SkyWest but if you have Delta colors on your plane and people bought a Delta ticket, anything negative you do reflects on Delta not just SkyWest.

Now when the host airline flies their own route, the partnership feature is disabled so the responsibility of ensuring there are no duplicate routes lies with the airline wanting to fly another airlines' routes. If they are lax in their due diligence, they will be the ones penalized the most vs what they could have made.

Here's how the numbers would break down for a Quest Kodiak flight - for jet flights codesharing can result in big paydays.....or big losses....

sample flight data taken from a recent Quest Kodiak flight report:
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Now the proposed codesharing payouts would look like this:
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Re: Partnerships & Codesharing - Unravel the Confusion Please

Post by Cat » Thu Jul 23, 2020 12:23 pm

Looking at my numbers again this morning, the 10% for each airline might be a bit much, but it would be an easy fix to just drop that to say 5% for each and a 10% overall penalty for duplicate routes. Joe can manipulate the actual percentage to suit what he thinks should be a proper bonus for using the partnership/codeshare program. It has to be enough to entice people to use it though, if it is not all that much more then people will simply say why bother.
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Re: Partnerships & Codesharing - Unravel the Confusion Please

Post by joefremont » Fri Jul 24, 2020 1:35 am

Interesting idea, that I am going to have to study more.

It occurs to me that while the SkyWest scenario you described is very valid. There is also something to be said about the other non-code share routes. I am more likely to get on your flight A to B if your partner has that code shared connector to my final destination
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Re: Partnerships & Codesharing - Unravel the Confusion Please

Post by sabahassani » Fri Jul 24, 2020 2:02 am

joefremont wrote:
Fri Jul 24, 2020 1:35 am
Interesting idea, that I am going to have to study more.

It occurs to me that while the SkyWest scenario you described is very valid. There is also something to be said about the other non-code share routes. I am more likely to get on your flight A to B if your partner has that code shared connector to my final destination
Hi dear Joe
a very interesting and amusing addition to the system, may I suggest a contract system to designate the code shared routes and also take into account the cargo system collaboration. also if possible to design something as to produce partnerships reports that gives insight to the specific route and partnership separate from the airline balance sheet. I am not a coder but if you want we can collaborate on this together as it can be a huge addition and create an edge over other providers.
cheers
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Re: Partnerships & Codesharing - Unravel the Confusion Please

Post by Cat » Fri Jul 24, 2020 3:19 am

It occurs to me that while the SkyWest scenario you described is very valid. There is also something to be said about the other non-code share routes. I am more likely to get on your flight A to B if your partner has that code shared connector to my final destination
Exactly how the real world works too! I buy a ticket from KLAS to KMBS with a connection in KDTW or KMSP and the short CRJ route from KDTW or KMSP to KMBS is handled by a regional (with their aircraft in Delta Connection livery), not the mothership Delta. But my ticket is purchased through Delta. With United, the other carrier serving KMBS, I would have to connect through KORD (big yuck) and the same thing applies with United Express, a contracted regional provider.

Not sure how it's all shaking out currently with COVID19 and I haven't been able to fly even as a passenger for many years but you get the idea. We tried to emulate some of that "in house" using fleets but to have others involved would make the whole thing pretty nifty. Start getting members to work with each other to form a worldwide network. But the only way they will do it, like the package system... they have to make substantially more than if they just made and flew the route direct themselves. Money talks
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Re: Partnerships & Codesharing - Unravel the Confusion Please

Post by Cat » Fri Jul 24, 2020 3:26 am

Some of the smaller management systems can get away with having specific passenger groups with specific destinations but for us to apply something like that would be a huge undertaking requiring some serious server computing power and data storage space, no doubt. I think the volume of passengers FSA moves daily would really prohibit something that detailed.
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Re: Partnerships & Codesharing - Unravel the Confusion Please

Post by Cat » Mon Jul 27, 2020 12:38 pm

To confirm that the current partnership system is broken - we just had a pilot quit and start his own VA and do a partnership and the host airline (that would be us) gets nothing in the terms of income per flight for sharing their route system with others. So there is no incentive for established airlines to share their route structure with anyone.
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Re: Partnerships & Codesharing - Unravel the Confusion Please

Post by jato0072 » Mon Jul 27, 2020 4:28 pm

I quit Fly Vegas to start my own daughter airline "Pacific Southwest Airlines" based on the old PSA based in my hometown of San Diego, California. I wanted to Codeshare and use Fly Vegas Routes. I think I figured out how to use their routes. I flew one but Fly Vegas did not receive any revenue.

I noticed my aircraft was full, despite having a low reputation. We surmised that was because I was using Fly Vegas routes, FV has 120 reputation. That is a neat feature.

It would be great if the Codeshare Airline received a piece of the revenue. Any other cool ideas so airlines could work together would also be welcome.

Thanks, keep up the good work!
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Re: Partnerships & Codesharing - Unravel the Confusion Please

Post by joefremont » Mon Jul 27, 2020 5:54 pm

jato0072 wrote:
Mon Jul 27, 2020 4:28 pm
I quit Fly Vegas to start my own daughter airline "Pacific Southwest Airlines" based on the old PSA based in my hometown of San Diego, California. I wanted to Codeshare and use Fly Vegas Routes. I think I figured out how to use their routes. I flew one but Fly Vegas did not receive any revenue.

I noticed my aircraft was full, despite having a low reputation. We surmised that was because I was using Fly Vegas routes, FV has 120 reputation. That is a neat feature.

It would be great if the Codeshare Airline received a piece of the revenue. Any other cool ideas so airlines could work together would also be welcome.

Thanks, keep up the good work!
Yeah, at the moment its disabled and we need to come up with a new scheme for implementing it. I am giving it a great deal of though and hope to come up with a plan soon, just need to make sure it does not have too many holes in it that can be exploited.
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Re: Partnerships & Codesharing - Unravel the Confusion Please

Post by Captain K-Man » Tue Jul 28, 2020 11:54 am

Whatever you come up with for this Joe my 2 cents is to please make any new Partnership requests come through the messaging system. I often overlook new requests since it shoves the partnerships at the bottom of the Overview page and I don't always scroll down that far. I've had like 4 partnership requests go unanswered from me because I was not notified there were any pending. And since it seems like many CEO's can't be bothered to send a letter of request at the very least we need to be notified automatically that a new request is pending. Thanks in advance!
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