Continental Airlines joined the Star Alliance Tuesday, becoming one of the top airlines in the network of 25 global carriers.
The switch marks the first time a major airline has switched alliances and brings Continental closer to United Airlines about 18 months after merger talks ended between the two carriers.
"We decided to upgrade our alliance to a first-class alliance," said Continental's President Jeff Smisek at a media event.
Joining the Star Alliance allows Continental to share pricing, scheduling and other information within the alliance, which also includes US Airways.
Continental expects its membership in the Star Alliance, the world's largest airline network, to reap USD$100 million a year. In 2008, the airline made USD$15.2 billion in revenue.
Smisek noted that no other carrier in the alliance had a strong foothold in the New York area, a hole that can be filled by Continental's hub at Newark Airport. In turn, United offers opportunities up and down the West Coast of the United States that Continental lacks.
"What you want is to ally yourself with carriers that offer flight opportunities that you yourself don't offer," Smisek told reporters. He is poised to become CEO of the airline on January 1, 2010.
A MARQUEE EVENT
In his remarks, Continental's CEO Larry Kellner noted that United played an instrumental role in bringing Continental into the Star Alliance.
After the two airlines ended merger talks last year, United's CEO Glenn Tilton offered to sponsor Continental's foray into its network.
"In the current economic environment, the role of alliances takes on an even greater significance," said Tilton, who is also chairman of the airline. "No one single carrier can profitably serve every market."
Continental was previously part of SkyTeam, which is led by Delta Air Lines, now the world's largest carrier after its merger with Northwest Airlines last year. That union relegated Continental to a junior partner in SkyTeam, Smisek said.
The US Transportation Department gave its final approval of Continental's switch in July.
Continental's entry into the Star Alliance was greeted with much fanfare Tuesday.
Lights flickered and music blared as executives from each airline in the alliance took their seats in front of reporters. Then the gray backdrop behind them dropped to reveal a plane emblazoned with the words "Star Alliance."
"We can offer our corporate customers today a lot better alternatives than a week ago," Continental's current CEO, Larry Kellner, told reporters.
