Pricing effects of code-sharing in Africa

Abstract

This study investigates the impact of code-sharing (CS) agreements on airfares in Africa, a region largely overlooked in existing airline cooperation research. Analysing a comprehensive dataset covering international one-stop routes in Africa from 2017 to 2019, we examine the direct effects of CS agreements on connecting itinerary discount economy fares that swap from interline to CS. Additionally, we explore the spillover effects of airlines adopting CS on the fares of those that do not implement it. Our key findings reveal that the implementation of CS agreements results in an approximately 18% reduction in airfares for African international routes. Furthermore, we identify a negative spillover effect, demonstrating reduced airfares for interline itineraries by 12% when rival pairs adopt CS, while online and direct itineraries experience smaller reductions (around 4%).