Daryl: I can’t see any airline getting busted for individually refusing to code-share. Concerted boycotts are a different matter, of course.

1 - “And if it is profitable, why are so many of them bankrupt?” This is not a valid assumption. They are going bankrupt because the industry as a whole is struggling. It’s very likely that code sharing is helping them not to lose even more money.

2 - These practices don’t constitute a “monopoly” and they are not “monopolistic.” They aren’t done in order to win a larger share of the market or otherwise discourage competitors. If they are illegal, it is because they are contracts in restraint of trade.

3 - the airline industry is heavily regulated by Congress. It’s easier to do things that would otherwise violate AT law if the courts can see that there’s already government oversight.

4 - When they overbook, airlines have to put bumped passengers on another flight. This requires airlines to know about what the other airlines are up to. If they don’t code share, then every time they overbooked, they would have to call up the other airlines, one by one, and ask them what seats were available.

5 - Code sharing makes economic sense for the individual airlines. It can’t be said that any airline would stand to benefit from reneging on their agreements. It’s also probably a custom and practice of the industry.

6 - When airlines buy tickets from other airlines, they are acting like any other customer. Refusing to do business with competitors can be an antitrust violation. (Aspen Skiing). If a big airline like Delta refused to code share with smaller airlines, forcing those smaller airlines to increase their number of flights, that could be seen as monopolization conduct designed to drive those small competitors out of business.

Unfortunately I don’t know enough about the inner workings of it myself to say what the FAA says about it, but I’d like to be able to follow the money. How is this different from Wal-Mart saying, “I’m sorry, Mrs. Jones, we’re out of product XYZ at the moment, but if you go next door to Target they’ll sell it to you at Wal-Mart’s advertised price” and then … splitting the money with Target? If the airlines split revenue from codeshare, how is that profitable? And if it isn’t profitable, why do they do it? And if it is profitable, why are so many of them bankrupt? Although I note that the ones that went out this week were small and unlikely to be in on the codesharing. But Delta filed bankruptcy last year after codesharing for years.

It seems fishy to me. It’s something I’d like to know more about.

Then again, it only takes two to establish a legitimate joint venture, either, which is why I don’t think the issue is anywhere near as simple as our hostess suggests. Is it possible that two or more airlines may conspire to code-share a single flight on a large plane rather than operating two smaller, competing ones, and further agree among themselves to charge consumers exactly $X for that shared flight, leaving no room for competition along a route where competition might otherwise have existed? Sure. It’s equally easy to envision a (much more typical, I think) scenario in which there wasn’t enough of a market to support both airlines running their own planes along the same route at about the same time, and a code share allows them to kinda-sorta compete where no competition would otherwise exist at all (and which one of the two airlines would then be unable to use even for connecting flights to other cities). Thus, depending on the implementation, a code share can either be pro- or anti-competitive. Not being in the industry, I have no idea what the process is for sorting out the two, e.g., whether code shares must be approved by the FAA, or whether such approval precludes anyone else from challenging a practice as a anti-competitive.

I just read a few things on your blog … what an experience you’re having. Is this a limited-time stay over there or indefinite?

I don’t understand why you think code sharing is illegal. They’re not colluding on the price or agreeing to run fewer flights so they can jack up prices.

But if Delta can sell the same flight at the same price on Northwest, whereas ordinarily Northwest would have to attractively lower its price to get that customer away from Delta, how is that not colluding on the price AND offering fewer flights? If there were a separate Delta and a separate Northwest on the same route, they would have to compete. Whereas now they can “share.” You are right that any company that could not lower its price enough to attract the customers would go out and then the remaining companies could raise the price a bit …… and then maybe the airlines would be solvent, not subject to government bailouts and chapter 11 reorg, etc. etc. etc.