This study presents an interactive airline network design procedure to facilitate bargaining interactions necessitated by international code-share alliance agreements. Code sharing involves partner airlines individually maximizing their own profits, while mutually considering overall profitability, traffic gains, and quality benefits for the markets in which they cooperate with their partners. This study uses a reference point method to solve the interactive multiobjective programming model, to support the bargaining interactions between two partner-airlines in an alliance negotiation. The impact of the code-share alliance network on market demand, alliance partners’ costs and profits, and levels of service are also discussed. A case study demonstrates the feasibility of applying the proposed models and elucidates how interactive multiobjective programming models may be applied to determine flight frequencies for airline code-share alliance networks. The results of this study provide ways by which alliance airlines can evaluate iteratively the output and profits of the alliance members under code-share alliance agreements.
European Journal of Operational Research 174(1), pp.404-426