Fuji Dream Airlines and JAL will expand their code-share flights around the summer of 2021. Have you heard the aviation term "code-share flight" before? This refers to a flight jointly operated by two or more airlines in cooperation, and there are many keywords to describe this type of collaboration.
Codeshares offer more flight options and access to lounges around the world
Aoki: "First of all, code sharing (joint operation) refers to the practice of multiple airlines using the flight numbers of multiple airlines on one flight. For customers, this has the benefit of allowing them to earn JAL mileage points on flights operated by other airlines."
Toyokawa: "For example, if you go from Japan to Dallas, you can go from one JAL flight per day to three flights in total by code-sharing with American Airlines, which operates two flights per day. Furthermore, by developing code-sharing flights with American Airlines for connecting flights from there, you can utilize the company's network. You can also use overseas airport lounges operated by code-share airlines, ride on larger aircraft that JAL does not use, and enjoy a change of pace."
Keijiro Toyokawa and Moe Aoki from the International Alliance Department of the Route Management Headquarters explained that code-sharing actually goes back a long way, with JAL starting in the 1960s.
Toyokawa: "Originally, JAL was expanding its routes on its own, but there were some places that were difficult to reach, so in the 1960s, they started expanding their network through partnerships. At the time, it was different from what we now call code-sharing, but I heard that it started with a partnership with Air France."
Aoki: "The partnership at that time was not just for sales purposes, but also to learn know-how. Since we had just started our business, we wanted to incorporate the services of global airlines that had more experience than competitors."
JAL's unique quality for codeshare flights
Thanks to you, the JAL name is well known in Japan, but that is not the case overseas. By operating code-share flights, the number of overseas customers who come into contact with the JAL name will increase.
Aoki: "We hope that overseas customers who are not familiar with JAL will be able to experience our service, which may lead to further increased awareness of the company."
On the other hand, even if the flight is operated by another airline, if it has a JAL flight number, a high level of safety and quality is required. We conduct thorough research before forming a partnership. Thus, there are currently three airlines operating codeshare flights in Japan and 36 overseas.
Partner airlines are friendly rivals as well as good friends
Toyokawa: "While there are many code-share flights in Europe and the US, there are still many in Africa. To expand the network, negotiations are necessary. For example, if a friend is not a relative, they may not be able to lend you a book. Negotiations are not an option for either company when routes are full of their own customers. We are the ones who negotiate."
Airlines that partner on codeshare flights are, so to speak, both friends and rivals. While they work together, they also compete on pricing, and the airline industry requires strategic navigation amidst complex relationships.
Toyokawa: "For example, it can be difficult to sell domestic flights that are fully booked with our own customers to customers of other airlines. Each airline has its own circumstances, and there are flights where code-sharing is possible and flights where it is not."
We conduct repeated negotiations, taking into account the circumstances of each airline, the timing of connections, flight times, etc. In order to maximize convenience for customers and minimize stress, it is necessary to constantly review the arrangement of code-share flights.
JAL is a member of the global airline alliance, Oneworld Alliance
Many of the airlines with which JAL has codeshare agreements belong to an airline alliance called the Oneworld Alliance, a global alliance with 14 member airlines and 1 associate member airline, totaling 15 member airlines, that has access to over 1,000 airports in 170 countries and regions around the world, and is a huge network with over 10,000 flights per day under normal circumstances.
Aoki: "Until the 1990s, before we considered joining oneworld, JAL's policy was to operate independently. However, with the acceleration of globalization and the future maturation of the Japan-origin market due to a declining population, we realized that we needed to strengthen our presence in overseas markets by utilizing alliances."
It joined the Oneworld Alliance in 2007. There are three major alliances in the world, and most airlines operating international flights are members of them, but there are also airlines that are not members of any alliance.
Aoki: "Because joining an alliance can make it difficult for airlines to partner with airlines outside the alliance, some airlines choose not to join in order to maintain the freedom to form alliances."
Toyokawa: "In that respect, Oneworld is tolerant and allows alliances with airlines outside the alliance. For example, Emirates is not a member of any alliance, but it operates codeshare flights with JAL. It has also had a long-standing partnership with Air France, which is part of the SkyTeam alliance, and has maintained a good relationship with them even after our company joined Oneworld."
High quality, safety and security. Reliability only possible with the One World Alliance
Although an alliance may impose certain restrictions on free collaboration, the significant benefits it offers more than make up for this.
Toyokawa: "Two airlines need to decide on their own framework for each partnership, but because alliances have common service standards, they can partner with many airlines at once. This gives customers who choose JAL a much wider range of options, and they can receive high-quality service on every flight."
Therefore, in order to join the Oneworld Alliance, airlines must have a high level of service and safety.
Aoki: "On the other hand, it's also proof that airlines that are members of Oneworld are guaranteed quality."
Going one step further from friends to relatives: the framework of a joint business
A step beyond alliances is the idea of a joint venture, which is a tie between airlines. JAL has partnerships with American Airlines, British Airways, Finnair, Iberia, and Malaysia Airlines, and is also considering joint ventures with Hawaiian Airlines, China Eastern Airlines, and Qantas.
Toyokawa: "Even if you form an alliance or share codes, you're still just friends. In the end, it doesn't change the fact that you want to operate your own profitable flights. As the alliance framework has matured, joint business has become a global trend as a new framework for collaboration, and JAL is actively working on it."
One of the benefits to customers that will be realized through this joint venture is an expansion of flight options.
Toyokawa: "For example, most flights from Narita to Europe and the US depart in the morning, when passengers are more likely to use them. However, there are cases where passengers coming from other parts of Japan find it more convenient to depart in the afternoon. In this case, the two airlines in the joint venture can discuss and decide to split the time, with one airline operating in the morning and the other operating in the afternoon. In a normal codeshare, a sales commission is provided, but in a joint venture, the sales revenue for the target route is pooled together and distributed. In other words, no matter which flight on the joint venture route is sold, the revenue will be the same."
Airlines do not discuss prices or flight schedules with each other because this would violate antitrust laws. However, if working together within a joint business framework would provide greater benefits to customers, exemptions from antitrust laws may be considered.
Deeper cooperation leads to higher service levels
A joint business arrangement in which two airlines operate flights as if they were one company is a system that can maximize convenience for customers. Another benefit is that the deep ties that are unique to a joint business make it possible to raise the standard of service.
Toyokawa: "The eternal mission of Japanese airlines is to provide Japanese cuisine on board. It is also an aspect that JAL customers are often concerned about in the services of partner airlines. For this reason, with airlines with which we have deep ties through joint business, we also work on mutual menu supervision in order to further satisfy each other's customers."
In the framework of joint business, you often hear the phrase "Your customer is our customer, Our customer is your customer." This means that there is no longer any separation between customers. Usually, raising the standard of service is one of the purposes of differentiation from other companies, but it also motivates companies to work together to raise their service levels.
Aoki: "Japanese hospitality and service are at a high level even by global standards. So once every few years, JAL flight attendants invite flight attendants from airlines around the world to give a lecture on hospitality."
The image might be close to this: airlines that have started a relationship with each other's relatives invite each other's families over and teach each other how to cook.
Toyokawa: "There are still many challenges to overcome in order to provide a natural hospitality experience for overseas airlines. For example, soup is served first in a Western-style meal, but it would feel strange to serve miso soup first in a Japanese meal. Joint ventures can be seen as a new way for airlines to understand each other's cultural differences and provide higher quality service."
Keeping the route running: Strengthening joint business efforts amid COVID-19 pandemic
Traditionally, the aviation industry has pursued a variety of collaborations, including code-sharing, alliances and joint ventures, with the goal of expanding networks. However, as the global coronavirus pandemic continues, the important role of joint businesses is attracting attention.
Toyokawa: "When it comes to joint business, the focus tends to be on network expansion, but with airlines being forced to make large-scale cuts in service and route reductions due to the COVID-19 pandemic, cooperation to maintain and restore networks has become an important theme."
Aoki: "The idea is for airlines to work together to continue offering flights without causing inconvenience to customers."
Joint business does not only "increase" options, but also "preserves" them. Even though the world is still in turmoil, there are still customers who need to fly. By cooperating with each other, airlines can continue to provide the option of "going anywhere in the world in an emergency."
As you can see, there are many different types of cooperative relationships between airlines. All of them increase the benefits for customers. If you ever fly internationally, please be sure to use flights of airlines that JAL has partnered with.
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The contents published are accurate at the time of publication and are subject to change.
