Continental Airlines, United Airlines agree on alliance

Continental Airlines and United Airlines, both based in the United States, have signed an agreement to connect their networks and operations worldwide. The two airlines which had in April 2008 decided not to merge, now have agreed on a broad marketing alliance that would provide many of the same revenue benefits of a merger, but without financial and operational risks that have worsened in view of the credit crisis and rising prices of oil.

Continental and United Airlines will cooperate on frequent-flier programmes, lounges, facility utilisation as well as information technology.

The “quasi-merger” will enable passengers eventually to book tickets with either airline, earn credit in both frequent-flier programmes, and redeem their miles with each carrier.

Continental Airlines, based in Houston, Texas, the United States, is the fourth-largest airline in the United States based on revenue passenger miles and operates flights to destinations throughout the United States, Canada, Latin America, Europe, and the Asia-Pacific regions. Continental Airlines’ principal operations are from its three hubs at Newark Liberty International Airport (in Newark, New Jersey), George Bush Intercontinental Airport (in Houston, Texas), and Cleveland Hopkins International Airport (in Cleveland, Ohio).

United Airlines, a subsidiary of UAL Corporation, is headquartered in Chicago,  the United States. United’s largest hub is O’Hare International Airport, with other hubs in Denver International Airport, Washington Dulles International Airport, San Francisco International Airport, and Los Angeles International Airport. United also has focus city operations at Narita International Airport, near Tokyo. United Airlines is the second largest airline in the United States.

Apart from Continental Airlines, United Airlines had also been exploring a merger with US Airways, which was later dropped.

As a part of the new agreement with United, Continental Airlines has agreed to join the Star Alliance, the world’s largest group of airline partners, of which United Airlines is already a member. Once it joins the Star Alliance, Continental Airlines will quit its membership with SkyTeam, another airline group.

According to a statement from Continental Airlines, the agreement will also end the company’s existing association with Northwest Airlines and Delta Air Lines. At present, Continental Airlines shares flight codes and routes across the United States and the world with Northwest Airlines and Delta Air Lines.

The statement added that the Continental-United alliance is yet to get approval from the US federal aviation regulators.