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United and Continential are now dancing partners

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CheapFlyer

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http://news.prnewswire.com/ViewContent.aspx?ACCT=109&STORY=/www/story/07-10-2009/0005057941&EDATE=

WASHINGTON, July 10 /PRNewswire-FirstCall/ -- The U.S. Department of Transportation (DOT) today approved the application for Continental Airlines (NYSE: CAL) to join the existing antitrust immunized alliance including United Airlines and eight other Star Alliance member carriers.

"We are pleased to receive final approval from the Department of Transportation," said Larry Kellner, Continental's chairman and CEO. "Continental is working to provide a seamless transition for its customers from the SkyTeam alliance to Star Alliance this fall. The DOT decision greatly benefits our customers, employees and shareholders. It ensures global competition with other antitrust immunized alliances while encouraging the retention and growth of open skies between the U.S. and other nations."

"Today's decision from the Department of Transportation facilitates the development of a competitive partnership that is good for consumers, our employees and the communities we serve," said Glenn Tilton, United's chairman, president and CEO. "United, Continental and the Star Alliance carriers will be able to compete more effectively in an increasingly global air travel market, while providing our respective customers with improved access to more of the world and creating opportunities for our employees."
Continental and United expressed their appreciation to the numerous community and civic parties whose enthusiastic support has been critical to the airlines' efforts to secure this approval. The airlines also thank their employees, their millions of customers and the travel professionals, congressional, state and local government representatives and business partners who urged timely approval of the application.

Continental and United also expressed their appreciation for the efforts of DOT Secretary Ray LaHood and his staff who have worked diligently to protect the needs of consumers, communities and airline employees by finalizing its order with modest adjustments while recognizing the issues facing the industry.

In addition to United, the eight Star Alliance members who have been granted DOT approval for antitrust immunity are Air Canada, Austrian, bmi, Lufthansa, LOT Polish Airlines, Scandinavian Airlines (SAS), SWISS and TAP Air Portugal.

Continental Airlines is the world's fifth largest airline. Continental, together with Continental Express and Continental Connection, has more than 2,750 daily departures throughout the Americas, Europe and Asia, serving 133 domestic and 132 international destinations. With more than 43,000 employees, Continental has hubs serving New York, Houston, Cleveland and Guam, and together with its regional partners, carries approximately 67 million passengers per year.

Celebrating its 75th anniversary this year, Continental consistently earns awards and critical acclaim for both its operation and its corporate culture. For the sixth consecutive year, FORTUNE magazine named Continental the No. 1 World's Most Admired Airline on its 2009 list of World's Most Admired Companies. For more company information, go to continental.com.

United Airlines (Nasdaq: UAUA) operates over 3,100 flights a day on United and United Express to more than 200 U.S. domestic and international destinations from its hubs in Los Angeles, San Francisco, Denver, Chicago and Washington, D.C. With key global air rights in the Asia-Pacific region, Europe and Latin America, United is one of the largest international carriers based in the United States. United also is a founding member of Star Alliance, which provides connections for our customers to 912 destinations in 159 countries worldwide. United's 48,500 employees reside in every U.S. state and in many countries around the world. News releases and other information about United can be found at the company's Web site at united.com.
*Based on United's forward-looking flight schedule for July 1, 2009, to July 1, 2010
 
I like how they laude Continental but only describe United as having key global air rights in the Asia-Pacific region.

Awesome.
 
Well, I will tell you this. I am celebrating by sitting in the United Red Carpet Club as we speak in ORD. I am waiting on my girlfriend's flight to get in from IAH. They need free wireless and free booze to come up to CAL's President's Club standards..... What is with no free wireless? They do have a bit better snack selection....
 
I would say a merger is less likely now that we have a partnership with United. If the DOT had denied it, we would of merged this year. What the future holds, I don't know. But for now, it seems a merger is off the books for awhile. The new chapter will be any JV's that they offer with golden carrots attached. Alliance is fine, NO JV's!!!! Can you say whipsaw?
 
Why merge us when they can do the "whipsaw" on us? "You guys want to fly those shiny new 787's (assuming they ever fly), well prove it!" "Who can concede the most to acquire the new airplanes?" I just fled the Comair/ASA/Skywest vortex that Delta created and now it is time to unleash this concept on the 'majors'.

"Let's get these nihilistic idiots to underbid and undercut one another to get the shiney new airplane that they fly for minimum wage." I can see it coming.........

"All you got to do is placate their little ego's and give them some status" " Let them think they are 'players', we will be laughing all the way to the bank."- Star Alliance management (behind closed doors)

It is like watching a train wreck in slow motion. Oh, by the way, there are new furlough rumors here at CAL.
 
Would this lead to a higher or lower probability of a merger?
United and USAirways already have a code-share agreement and are already both Star Alliance members. So to answer your question, it has no bearing on merger probability.
 
I would have to say that United/Continental/USAir is now part of a "trusted" alliance that controls a lot more market share than they did before.

Lets not kid ourselves, this is exactly what was needed to compete with Delta/NWA. Its not everyday you get to "sleep" with one of your major competitors and set prices. This is a good thing (I'm hoping) as it may cut a little bit into the cutthroat competition/pricing in the US. Yes, they still have to compete with SWA and other LCO's, but it's a definite plus for the legacy airlines IMO.

-CF
 

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