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United-Continental Merger

Continental moves closer to United

Ashley Milne-Tyte Oct 27, 2009
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United-Continental Merger

Continental moves closer to United

Ashley Milne-Tyte Oct 27, 2009
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TEXT OF STORY

Bill Radke: Continental and United Airlines were talking merger last year before those talks broke down. But today the two airlines get a little cozier.

Continental is leaving the SkyTeam partnership
and joining the Star Alliance, which is headed by United. Now you probably think of these alliances as mile-sharing clubs. But Marketplace’s Ashley Milne-Tyte reports, there’s more to them than that.


Ashley Milne-Tyte: Switching from one airline team to another is quite a process. But Continental says it’s worth it. The change is expected to bring the airline an extra hundred million dollars a year.

Continental will team up with airlines like United and Lufthansa on routes all over the world. Airline analyst Darryl Jenkins says joining Star Alliance could lead to a merger with United in the future.

Darryl Jenkins: An alliance like this gives your employees a good chance to know the employees of the other one. See how close their cultures fit. Think of it as dating in the romance game of airlines.

He says after all, Delta and Northwest got used to each other as members of the SkyTeam alliance for several years. Then they merged, and the merger has been pretty successful.

Right now, Continental is preparing for courtship. It’s busy replacing the old SkyTeam logos on its planes — and even its napkins. Which, so far, are still free.

I’m Ashley Milne-Tyte for Marketplace.

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