The Non-Merger Merger

With oil spiraling towards $150, Continental a found the 4th way to survive the fuel crisis. In conjunction with the retirement of the Classic 737s, the airline is joining up with Star Alliance and apparently abandoning Sky Team and Delta-Northwest in the process. It’s another way to cut capacity by sharing revenue on overlapping routes. It’s the non-merger merger.

What’s the best way to operate a profitable route? Let someone else fly it.

Larry Kellner was quite clear in his desire to keep Continental on its own. Should be very interesting to see how this one plays out.

Continental Airlines and United Airlines Announce Comprehensive Planfor Global Cooperation; Continental Plans to Join Star Alliance

CHICAGO, June 19 /PRNewswire-FirstCall/ — Continental Airlines (NYSE:CAL) and United Airlines (Nasdaq: UAUA) today announced a framework agreement to cooperate extensively, linking their networks and services worldwide to the benefit of customers, and creating revenue opportunities and cost savings and other efficiencies. In addition, Continental plans to join United in the Star Alliance, the most comprehensive airline alliancein the world.

One Response to The Non-Merger Merger

  1. skeptic June 19, 2008 at 6:40 pm #

    umm, what? why partner with the sinking ship that is United? I really don’t get it. that almost makes as much sense as US Airways and United merging. I understand you don’t have to deal with the goofy union issues, but where is the cost advantage in this? So your profitable routes can be booked by United passengers and UAL gets the half the money? Why not face them head to head and undercut, and get all the money?