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Airline codeshare alliances: Marketing boon and revenue management information systems challenge

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<mark>Journal publication date</mark>06/2013
<mark>Journal</mark>Business and Information Systems Engineering
Issue number3
Volume5
Number of pages11
Pages (from-to)153-163
Publication StatusPublished
Early online date4/05/13
<mark>Original language</mark>English

Abstract

The paper juxtaposes the challenges that airline codeshare alliances\ncreate for analytical information systems on the one hand and their\nmotivation from a marketing perspective on the other. The authors review\nthe state-of-the-art literature on potential marketing benefits and\nanalyze the impact on airline planning systems. In this regard, revenue\nmanagement systems are of particular interest. Based on a simulation\nstudy, the authors infer a severe impact of decentralized codeshare\ncontrols as currently widely implemented in the industry on revenue\nmanagement performance. In the scenarios examined, complementary\ncodesharing reduces alliance-wide revenues by up to 1 %. Losses\nincrease when a carrier experiences high local demand or a high degree\nof codeshare demand, and disseminate over the whole network. Virtual\ncodeshares also cause losses of 0.3 % to 1.5 % depending on the\ndiscount level offered by the marketing carrier and on the demand\nstructure. Finally, the authors formulate a set of managerial\nimplications based on these findings.