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20/6/2008 – Continental & United Airlines Announce Joint Venture : Is This Good For Passengers?
Once again the landscape of airline service in the United States is changing drastically. For many years Continental Airlines has been intricately intertwined with Northwest Airlines, as well as been a partner of Delta Airlines and a member of the SkyTeam airline alliance.
Yesterday an announcement, which many saw coming, will wind down Continental’s deep roots with Northwest, Delta and SkyTeam. Yesterday Continental announced its new partnership with United Airlines and it’s intent to join rival global airline alliance “Star Alliance.“
There had been speculation of a merger between United Airlines and Continental Airlines once Delta Airlines and Northwest Airlines announced a merger. While Continental and United will not be merging, this new partnership will sprout extensive code-share flights between these two airlines. Both airlines service unique markets, which should avoid extensive overlap, and the airlines service non-competing ‘hubs.’ Overall their route code-sharing could actually be a positive for passengers!
For metro-New York flyers the intention of Continental to join the Star Alliance will means the return of ‘New York-London’ (well not technically New York, really Newark (EWR)) non-stop service. Since United Airlines stopped flying from JFK-to-London Heathrow, the Star Alliance has been the only major global airline alliance without non-stop flights on one of the most lucrative routes in the world.
The joint venture of Continental and United, and Continental’s intention to join the Star Alliance should take approximately a year. Passengers who earn SkyTeam miles on Continental will continue to do so for now. Northwest Airlines passengers who enjoy their upgrades on Continental should expect to continue receiving upgrades for the immediate future (and vise-versa). The transition of frequent flyer programs should be announced well in advance and with any luck the process will go ‘almost smoothly.’
Personally, I’d rather see a joint venture such as this one rather than a merger. A joint venture reduces overall costs for airlines in some ways, while still giving the flying public more options. The more options we have as passengers the more competition there is, which can offer lower fares and more competitive routes for us to fly. Mergers and airline closures not only affect the flying public, but also put people out of jobs.
A healthy airline industry (if we can return to that) employs thousands of people, not just within the airline, but with the aircraft manufacturers, the support staff at the airport, the RedCaps at the curb and many others we often forget about. If a healthy joint venture can keep two large global airlines flying then more people will remain employed…….and I am all for people keeping their jobs!