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The case deals with the code sharing agreement between Air India and Virgin Airways, the second biggest airline in the UK after British Airways. The arrangement was considered to be a significant development for the ailing Air India. Under the arrangement, Virgin Airways was to fly three flights a week on the Delhi-London route. In July 2000, Virgin Airways started off with two flights a week. It was to start the third flight from October 2000. However, until late 2001, Virgin Airways was not allowed to fly a third flight. With the global aviation downturn in 2001, Virgin Airways was finding it difficult to sustain itself with two flights a week. It threatened to exit from India, if it was not allowed to fly the third flight. The case is intended for MBA/PGDBM level students as a part of the business environment curriculum. It is so structured as to help students understand why the code sharing arrangement between Air India and Virgin Airways did not yield the expected results. At the end of the discussion, students should also have a good idea of the advantages of tie-ups between major airline companies.