from USA TODAY
June 20, 2008
What they're saying about the
United-Continental alliance ...
A day after Continental announced its intention to partner with United and defect from the SkyTeam frequent-flier group to the Star Alliance, the story remains a hot topic in the airline industry. Here's what the newspapers in each of the airlines hometown have to say about the news:
The Chicago Tribune (free registration) says "the alliance is an important victory for United Chief Executive Glenn Tilton, whose reputation as a dealmaker appeared tarnished after merger discussions with three carriers, one of them Continental, didn't result in a deal. It also signals that the Chicago-based carrier is positioned to be a survivor in the shakeout that lies ahead for U.S. carriers if oil prices remain at current levels, analysts said." The paper adds the deal "will bring most of the benefits of a merger, analysts said, without the mess and high costs of merging disparate workforces."
Robert Mann, president of aviation consulting firm R.W. Mann & Co., tells the Tribune: "Importantly, this gets (the airlines) an even more attractive end-to-end global network." The paper also notes that if Continental and United are successful in a bid for antitrust immunity, they could begin to work more closely with fellow Star Alliance partners
Lufthansa and Air Canada on trans-Atlantic routes. The Tribune says: "If they receive the blessings from U.S. and European regulators, the four carriers could closely collaborate on scheduling, marketing and even the type of aircraft used on a given route. Such arrangements typically involving sharing expenses among partners and divvying up the profits that accrue from linking carriers as well as new markets."
Still, the Tribune says the United-Continental alliance could take some time to consummate, writing that it 'isn't likely to take effect for at least a year. Continental must wait for Delta and Northwest to complete their merger, triggering a provision that will free Continental from its SkyTeam contract. Continental must also give nine months notice before it exits."
The Houston Chronicle adds: "Nothing changes for the time being … . It could take at least a year for Houston-based Continental to get regulatory approvals and extricate itself from existing alliances with Sky-Team and Delta and Northwest airlines, which are prospective merger partners." Carl Tobias, a professor at the University of Richmond School of Law, tells the Chronicle: "I don't think it is going to be terribly difficult compared to a merger. It seems conceivable they may be able to get some agreement in principle out of the antitrust folks before the Bush administration leaves office."
And, one sign of good news for the airlines' management teams, the Chronicle notes "Continental's pilots union was cautiously optimistic. Capt. Jay Pierce, head of the local, said the deal could allow the company to receive the benefit of a merger without the hassle." Pierce tells the Chronicle: "To that extent, we are pleased."
As for
US Airways' continued role in Star Alliance, the Chronicle suggests that could become unclear. "US Airways, which has its own code-share ticketing arrangement with United, was not mentioned in Thursday's news release other than being listed as a Star Alliance member," the Chronicle notes. Consultant Mann tells the paper: "There will be a question as Continental and United try to get a full network code-share domestically whether the DOT will still permit the existing US Airways and United code-share to stay in place."
For more perspective from United's hometown, check out the full version of the Chicago Tribune (free registration) story. And for the view from Continental's hometown of Houston, check out the full Houston Chronicle story.
USA Today
