Airline Codeshare Alliances - Marketing Boon and Revenue Management Information Systems Challenge

Authors

Max Gerlach, Freie Universität BerlinFollow
Catherine Cleophas, Freie Universität BerlinFollow
Natalia Kliewer, Freie Universität BerlinFollow

Document Type

Research Paper

Abstract

The paper juxtaposes the challenges that airline codeshare alliances create for analytical information systems on the one hand and their motivation from a marketing perspective on the other. The authors review the state-of-the-art literature on potential marketing benefits and analyze the impact on airline planning systems. In this regard, revenue management systems are of particular interest. Based on a simulation study, the authors infer a severe impact of decentralized codeshare controls as currently widely implemented in the industry on revenue management performance. In the scenarios examined, complementary codesharing reduces alliance-wide revenues by up to 1 %. Losses increase when a carrier experiences high local demand or a high degree of codeshare demand, and disseminate over the whole network. Virtual codeshares also cause losses of 0.3 % to 1.5 % depending on the discount level offered by the marketing carrier and on the demand structure. Finally, the authors formulate a set of managerial implications based on these findings.

Recommended Citation

Gerlach, Max; Cleophas, Catherine; and Kliewer, Natalia (2013) "Airline Codeshare Alliances - Marketing Boon and Revenue Management Information Systems Challenge," Business & Information Systems Engineering: Vol. 5: Iss. 3, 153-163.
Available at: https://aisel.aisnet.org/bise/vol5/iss3/4