Greetings from sunny overcast and warm Fort Lauderdale! The flight was very good and I’ll share my thoughts on Southwest and their recent changes (I haven’t flown them in a year) when I get back.
Well this has been rumored ever since Continental turned down a merger with United, and it has finally happened. Continental will be launching a codeshare program with United, though the airlines will cooperate in many ways other than a simple codeshare, as the press release says. More importantly (I think), Continental wants to join the Star Alliance.
Honestly this move isn’t too shocking because of events going on in Skyteam. With the Northwest-Delta merger and their partnership with Air France and KLM, Continental probably felt a bit left out.
Such a move is fantastic for Continental and Star Alliance in terms of routes, as Continental is strong in areas this alliance is weak, meaning Continental will get a good amount of the traffic in these areas. The first market is New York. Right now, Oneworld and Skyteam dominate the international market here with airlines like American, British Airways, and Air France. Star, on the other hand, doesn’t have a large United States carrier with a signifcant international operation out of New York. US Airways has a nice operation out of LaGuardia, but it is mainly domestic flights. Continental’s hub in Newark will dramatically change this situation.
The second area is South America, where Star has been lacking ever since Varig left the alliance. Continental has a good number of routes in this area itself, but it also has very close relationships with Copa Airlines of Panama and AeroRepública of Colombia. In fact, they all have the same frequent flier program. Both airlines are owned by the same parent company, and Continental used to have a large amount of shares in Copa. If these airlines go to Star (Copa is an affiliate member of Skyteam), it will really help. (Skyteam will only get a bit weaker in this market as AeroMexico is aslo a member.)
This move also works from a marketing perspective. Star has always tried (at least I think so) to be a alliance for business travelers. Continental has also marketed itself this way, and United has tried to, but has failed recently, as Cranky Flier pointed out a few days ago. Does Continental lose much here? Well, Air France and KLM are big European partners to lose, but it does gain Lufthansa.
PlaneBuzz speculates that this move could be a “trial marriage,” though I honestly doubt it. Remember, United codeshared with US Airways after that merger wasn’t allowed to go through. Granted, that merger was prevented because of government intervention, but I think in both cases United tried to get the next best thing.
Of course this change needs some regulatory approval. The press release also mentions that the Delta-Northwest deal has to go through for this to happen, probably because Northwest still has a golden share in Continental (please correct me if I’m wrong).
On a side note, what about US Airways? It has already sent out a note to its employees about the codeshare. Also, the press release about the codeshare says this:
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.
US Airways isn’t named with the other big carriers. It makes one think where US Airways will fit into the puzzle.
Anyways, I’m now officially on vacation. Tomorrow I will head down to Miami and board the Liberty of the Seas. I do have three posts ready, though, and my good friend Jon wil be posting them on Monday, Wednesday, and Friday. Thanks Jon!
Dan,
Continental did redeem it’s golden share within weeks after the NW/DL deal was announced.