Alliances still have a use

Okay, we knew they were softening us up for something. When Continental put up a website the other day on consolidation, we figured they were getting us ready for something. After all, they were in merger talks with United and news could break any day. It did, and it wasn’t what we were expecting. bag-0789.jpgThe airline came out and said that no, it wasn’t merging with United or anyone else, and that it was strong enough that it could survive in the big bad world in its own.
Call it Larry Kellner’s big day. The airline made a few points that most of us know but which deserve repeating: “we have significant cultural, operational and financial strengths compared to the rest of the industry, and we want to protect and enhance those strengths – which we believe would be placed at risk in a merger with another carrier in today’s environment.”
Continental did say it will almost definitely leave SkyTeam now that SkyTeam as an alliance focuses on Delta/Northwest and Air France/ KLM as its underpinnings. Where will Continental go? We think oneworld is its likely home, given that alliance’s looser structure and the fact that Star is dominated by United. All of which says something about the utility of alliances in today’s airline world.

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