In 1967 Richard Henson partnered his Hagerstown commuter airline with Allegheny Airlines in the first known code-share-type arrangement.

The term "code-sharing" was coined by the Australian Qantas and American Airlines in 1990, when the two airlines provided their first code-share flights between Australian and US cities.

Since then, code-sharing has become widespread in the airline industry, particularly with the formation of large alliances such as Star Alliance, SkyTeam and One World. These alliances have extensive code-sharing networks.

In a code-sharing arrangement, airlines share their two-letter IATA identification codes on the flight schedules of other airlines, allowing them to sell tickets to destinations they do not fly to.

In this way, flights can be marketed by one airline, known as the marketing airline, and operated by another airline, known as the operating airline. There are different types of code-sharing arrangements, and airlines choose the one that best fits their business models. Several airlines can code-share simultaneously on the same flight.

Code-sharing has become a vital marketing tool, as it increases connectivity by enabling airlines to offer numerous destinations with a wider choice of flights to passengers with minimal additional equipment, resources and costs. It is very advantageous, through economies of scale and economies of scope.

Code-sharing must conform to the requirements stipulated by governments, bilateral air service agreements (BASA) and airline trade organisations such as the International Air Transport Association (IATA).

A US airline can only code-share with a foreign airline that has an air operator certificate (AOC) issued by an FAA IASA (Federal Aviation Administration International Aviation Safety Assessment) Category 1 country.

IATA only recognises code-share agreements between airlines that are IATA members and are registered by IATA under its Operational Safety Audit (IOSA) programme. IOSA is an internationally recognised and accepted evaluation system designed to assess the operational management and control systems of an airline, and is the benchmark for global safety management in airlines. All IATA members must remain IOSA-registered to maintain IATA membership.

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In order for Caribbean Airlines Ltd (CAL), as a foreign airline, to code-share with a US airline, prior approval is required from the US Department of Transportation (DOT) in the form of a statement of authorisation under the DOT’s economic regulations, 14 CFR Part 212. The DOT approves the application if it determines it is in the public interest to do so.

CAL does not fly to Los Angeles (LAX), but a code-share agreement between CAL and Delta Airlines (DL) will allow CAL to sell tickets from Port of Spain (POS) to LAX. CAL will transport passengers to New York and the passengers will travel onward to LAX on a DL flight that will carry both the DL flight number and the CAL flight number.

Likewise, C