Codeshare facility denied to United Airlines, Emirates; what does it mean

Centre has refused United Airlines to codeshare with Emirates on routes from India, The Economic Times (ET) reported. The permission to codeshare was denied as this is not covered under the traffic rights agreement between India and Dubai.

What is a codeshare agreement?

A codeshare agreement, also known as codeshare is a commercial agreement under which two or more airlines come together and display an airline service as their own even if all of them don't have an aircraft on a given route.

For example, a flight may be operated by Carrier A but Carrier B and Carrier C can also sell seats on that aircraft as part of the codeshare agreement. This is a common practice in the aviation industry.

It helps airlines to offer a wider set of routes to their customers. Additionally, it also helps airlines prevent the risk of vacant seats on their flights and maximise earnings.

The implications of the decision

The latest denial to codeshare between United Airlines and Emirates is a setback to the landmark agreement the two airlines signed last year. The agreement was expected to bolster their services and network in India.

President of Emirates, Tim Clark told ET, "United approached the Indian government asking for permission to put their code on our flights from India but hasn't been allowed by the government to do so. So as much as difficult it is, that's the way."

The government officials aware of the development told the newspaper that the bilateral agreement between India and Dubai does not allow a third airline to use the seats.

The decision is likely to hurt United Airlines, which has been forced to stop its direct flights from New Delhi because of the closure of Russian airspace for US carriers, the report said.

The denial of Russian airspace has increased operating costs for American carriers. Due to this, United has cancelled its four routes which include San Francisco to New Delhi and Newark to Mumbai, ET reported.