United and Continental get DOT approval

mhermann596

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http://online.wsj.com/article/SB123913242990197939.html?ru=yahoo&mod=yahoo_hs
Continental Airlines Wins Approval to Join Star Alliance

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By CHRISTOPHER CONKEY and PAULO PRADA

WASHINGTON -- The U.S. Transportation Department on Tuesday gave Continental Airlines Inc. preliminary approval to join a global alliance that cooperates on scheduling and revenue sharing, a sign the Obama administration may not support a congressional effort to limit such alliances.
The administration's decision will allow Continental to join the Star Alliance with UAL Corp.'s United Airlines, Air Canada, Deutsche Lufthansa AG and other carriers. It also grants the alliance antitrust immunity, in essence giving the carriers permission to act as a single airline on international routes. The approval was expected and is consistent with policy under previous administrations.
But the Continental action comes as Rep. James Oberstar, a Minnesota Democrat who serves as chairman of the House Transportation and Infrastructure Committee, is pushing legislation that would curtail international airline alliances.
The agreements, especially when fortified by antitrust immunity, enable airlines to act in ways that would otherwise be considered collusive. Mr. Oberstar, who couldn't be reached to comment, says these alliances limit competition and hurt consumers.
A DOT spokesperson declined to comment on Mr. Oberstar's proposal.
The Transportation Department also said it will allow Continental, United, Air Canada and Deutsche Lufthansa to form a new joint venture called Atlantic Plus-Plus. Under the venture, the carriers will be permitted to jointly manage sales, capacity, marketing and revenue, allowing them to eliminate some competing flights and instead steer passengers onto a partner's plane. This approval doesn't apply to domestic service.
The Star Alliance competes with two other alliances. One is SkyTeam, an alliance that currently includes Continental, Delta Air Lines Inc. and Air France-KLM SA. AMR Corp.'s American Airlines, part of the oneworld alliance with British Airways PLC and Spain's Iberia Lineas Aereas de Espana SA, has also asked the government for antitrust immunity to cooperate more closely with those carriers on trans-Atlantic flights. The Transportation Department is expected to make a decision on that petition in the autumn.
For Houston-based Continental, the switch to the Star alliance will give it a bigger and more strategic role than it currently has in SkyTeam, where many of its routes overlapped with Delta. By aligning itself with United, whose main international routes lie across the Pacific, and Lufthansa, one of the biggest carriers in Europe,the airline is expected to enjoy a greater volume of transfer traffic and broader international reach than it does now. Continental expects to make the switch to Star later this year, after it modifies sales and reservations systems so they can communicate directly with those of its new partners.
In a statement, the Transportation Department said the alliance would "be in the public interest because it would support increased levels of service in international markets served by the carriers, give consumers more travel options and shorter travel times, and reduce fares."
Write to Christopher Conkey at christopher.conkey@wsj.com and Paulo Prada at paulo.prada@wsj.com
 

Yuppyguppy

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perhaps...and only if we can stop Glenn and his bastard gang from the Aer Lingus deal. If they win you can kiss everyone's ass on this board good bye.
 

~~~^~~~

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Never mind ... not a joking matter.
 
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ewrord

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On the contrary - this will ensure there is no merger. This is as far as CAL will go with this horrible dance.


Why would CAL, want to subject their passengers to United's service if they didn't believe in United and its product? Obviously they are not afraid to sell a Continental ticket that puts their customer on a United flight.
 

Ex737Driver

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Should it come to pass, who is going to fly this horrible abortion that UAL and Aer Lingus are proposing? And what is ALPA going to do/not do about it?
 

skywdriver

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On the contrary - this will ensure there is no merger. This is as far as CAL will go with this horrible dance.
I agree, at least for now. There might be a merger later on down the road, but I would bet this rules it out for the next couple of years at least. I don't know why everyone thinks a merger is right around the corner. For what reason??? They are going to see what benefits they can get with the alliance before they go back to the table and start thinking about a merger.
 

Scrapdog

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I agree, at least for now. There might be a merger later on down the road, but I would bet this rules it out for the next couple of years at least. I don't know why everyone thinks a merger is right around the corner. For what reason??? They are going to see what benefits they can get with the alliance before they go back to the table and start thinking about a merger.
Spot on. The fact CAL joined the STAR Alliance was simply due to DAL and NWA merging and presenting an unfavorable situation for CAL with SkyTeam...nothing more, nothing less.
 

whatitdoing?

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..............
 
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Scrapdog

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UAL pilots.....for sure a merger going to happen
CAL pilots.....for sure a merger ain't going to happen.

WTF do we know??? I think since we didn't merge last year, it's going to be awhile before we revist it. It might happen this year, maybe in 10 years. Who knows and who cares....out of our control.
It ain't happening anytime soon.
 

Yuppyguppy

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Should it come to pass, who is going to fly this horrible abortion that UAL and Aer Lingus are proposing? And what is ALPA going to do/not do about it?

Outsourced to a third party...that is why it is so dangerous.
 

whatitdoing?

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Well, I'll have to agree contrail67, it seems like they're aligning things, but that could just be for mutual benefit. If fuel climbs back up, I think it's a done deal. But with fuel pretty stable in the 40-80 range, i don't think it'll happen anytime soon. Also, I think once UAL get's their finances in order and turns things around, a merger probably will happen. I think a merger didn't happen last year because UAL just wanted to fire sale the airline to CAL with all the problems. Clean it up....maybe. Anyhow, what do we know?
 

eaglesview

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Shhhh Glen Tilton is keeping tabs on FI to try and get guidence on this merger issue. Careful what you write!!
 

Rez O. Lewshun

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Scrapdog is correct.... Star Alliance provides 80%-ish of what a merger yields.....
 

Fubijaakr

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Enough
MHO, a UAL/CAL merger is still a distinct possibility.
 
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