CHICAGO, June 19 IL-Continental-United
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 alliance in the
world.
"Continental's plan to partner with United and join the Star Alliance will
provide substantial new opportunities for all of our customers," said Larry
Kellner, chairman and CEO of Continental. "In a network business, there is
significant value gained from linking with larger networks to provide truly
national coverage and expanded global reach, and exploring new ways to reduce
costs and improve efficiencies. As we experience some of the most challenging
conditions airlines have ever faced, we look forward to the benefits of a new
relationship with United and the other Star Alliance members."
Teams from the two organizations worked intensively over the last several
weeks exploring creative solutions for how the two companies could achieve
efficiencies and synergies that expand beyond the well-established benefits of
codesharing. Their work focused on plans for significant cooperation on
frequent flier programs, lounges, facility utilization, information technology
and procurement. This work was assisted by the efficiency opportunities
identified and relationships developed during the parties' earlier merger
discussions.
"The teams worked well together to identify opportunities to create a
unique and competitive partnership extending well beyond a traditional code
share agreement," said Glenn Tilton, chairman, president and CEO of United.
"On behalf of the Star Alliance, I am very pleased to invite Continental to
join as a member. Continental will bring significant new assets to our global
alliance, and our two companies will work together effectively with our
partners to provide the best overall network in America and the world."
Kellner and Tilton are meeting in Chicago this afternoon to sign a
framework agreement outlining the systemwide alliance and cooperation
principles between their carriers.
Antitrust Immunized Joint Ventures
Through this new partnership, Continental and United plan to establish
joint ventures allowing them to cooperate with each other and with other Star
Alliance airlines in international regions and compete more effectively in an
increasingly global air travel market.
Initially, Continental will request the U.S. Department of Transportation
(DOT) to allow it to join United -- along with Lufthansa, Air Canada and six
other carriers -- in their already established antitrust immunized alliance.
This will enable Continental, United, Lufthansa, Air Canada and other
immunized Star Alliance carriers to work closely together as other antitrust
immunized alliances do, and to establish trans-Atlantic and other
international joint ventures so they can deliver highly competitive flight
schedules, fares and service. The planned trans-Atlantic joint venture, in
which Continental, United, Lufthansa and Air Canada will pool revenue, will
permit the carriers to compete more effectively with the proposed joint
venture involving certain SkyTeam members that was recently granted antitrust
immunity. The trans-Atlantic joint venture will combine the strength of the
carriers to create a more efficient and comprehensive trans-Atlantic network
for the carriers' customers.
Joint ventures are also planned for the Latin America and Asia/Pacific
regions, involving Continental, United and other members of the Star Alliance.
Both antitrust immunity and code-sharing are subject to receipt of approvals
from applicable national authorities.
Domestic Codesharing and Frequent Flier/Lounge Reciprocity
Continental's and United's route networks are highly complementary, with
little overlap, so they add value to each other and to customers who are
planning domestic and international itineraries.
In the United States domestic market, where antitrust immunity for solely
domestic travel would not apply, the two airlines plan to begin broad
code-sharing, which facilitates the creation of itineraries using both
carriers, as well as frequent Flier program, elite customer recognition and
airport lounge reciprocity. These cooperative activities are subject to
regulatory notice to applicable authorities and Continental exiting certain of
its current alliance relationships. Under code-sharing, customers will benefit
from a coordinated process for reservations/ticketing, check-in, flight
connections and baggage transfer.
Frequent flier reciprocity will allow members of Continental's OnePass
program and United's Mileage Plus program to earn miles in their accounts when
flying on either partner airline and redeem awards on both carriers. Travel on
either carrier will count toward elite customer recognition. Similarly, each
carrier's customers will have access to both Continental's Presidents Club
network and United's Red Carpet Club network of airport lounges.
Continental Joining Star Alliance
Continental's plans to join the Star Alliance and the other planned
cooperation are subject to receipt of certain regulatory and other approvals
and the termination of certain contractual relationships, including
Continental's existing agreements with SkyTeam members that restrict its
participation in another global alliance. Continental intends to terminate its
existing agreements with SkyTeam members and obtain the necessary approvals to
enter the Star Alliance, although Continental may not be successful, and the
time period for doing so may be out of Continental's control. For example, a
principal contractual restriction will not terminate until nine months after
the closing of the proposed Delta/Northwest merger. Continental intends to
transition out of SkyTeam and into the Star Alliance in a customer friendly
manner.
Joining the Star Alliance will connect Continental with United and 19
other airlines around the world. Within Star, frequent Fliers enjoy
reciprocity with respect to both mileage accrual and redemption among the
member airlines. The airlines also reciprocally recognize elite status, and
provide access to the worldwide network of lounges operated by the Star
Alliance airlines.
About the Star Alliance
The Star Alliance network was established in 1997 as the first truly
global airline alliance to offer customers worldwide reach and a smooth travel
experience. Star Alliance received the Air Transport World Market Leadership
Award in 2008 and was voted Best Airline Alliance by Business Traveller
Magazine in 2003, 2006 and 2007 and by Skytrax in 2003, 2005 and 2007. The
members are Air Canada, Air China, Air New Zealand, ANA, Asiana Airlines,
Austrian, bmi, LOT Polish Airlines, Lufthansa, Scandinavian Airlines, Shanghai
Airlines, Singapore Airlines, South African Airways, Spanair, SWISS, TAP
Portugal, Turkish Airlines, THAI, United and US Airways. Regional member
carriers Adria Airways (Slovenia), Blue1 (Finland) and Croatia Airlines
enhance the global network. Air India and EgyptAir have been accepted as
future members. Overall, the Star Alliance network offers nearly 18,000 daily
flights to 965 destinations in 162 countries.
About Continental
Continental Airlines provides more than 3,100 flights a day on Continental
and Continental Express to more than 280 U.S. and international destinations
from its hubs in New York/Newark, Houston, Cleveland and Guam. Continental is
the world's fifth largest airline, with routes throughout the Americas, Europe
and Asia. With more than 45,000 employees, Continental carries approximately
69 million passengers per year. For more company information, visit
http://continental.com.
About United
United Airlines provides more than 3,200 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's 55,000 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 http://united.com.
This press release contains forward-looking statements that are not
limited to historical facts, but reflect the company's current beliefs,
expectations or intentions regarding future events. All forward-looking
statements involve risks and uncertainties that could cause actual results to
differ materially from those in the forward-looking statements. Examples of
such risks and uncertainties include receipt of various regulatory approvals,
successful negotiation of documents implementing the planned alliances,
Continental exiting certain of its current alliance relationships, and other
approvals. Please read Continental's current report on Form 8-K filed on June
19, 2008 for additional information regarding these risks and uncertainties.
The company undertakes no obligation to publicly update or revise any
forward-looking statements to reflect events or circumstances that may arise
after the date of this press release, except as required by applicable law.
SOURCE Continental Airlines; United Airlines
