Continental must first exitSkyTeam gracefully

Continental Airlines’ recently announced plans to exit the SkyTeam global alliance and join up with United and other carriers in the Star Alliance is not likely to take effect until late next year. Last week, Continental, United and eight other Star Alliance airlines applied with the U.S. Transportation Department for permission to add Continental to the list of Star carriers that hold antitrust authority for international operations. That immunity isn’t necessary for domestic partnerships, but the United and Continental must give notice of joint activities to DOT, which they haven’t done yet, especially since Continental still is a member of SkyTeam, and it will take some time to exit that alliance. “Subject to these matters, Continental currently anticipates that it will join Star Alliance, and begin broad code-sharing and other commercial cooperation with United, in the fourth quarter of 2009,” the airlines said. Once the changeover takes place, customers will be able to earn and spend miles in both United’s Mileage Plus and Continental’s OnePass programs; travel on either airline will count toward elite status in the flyer’s preferred program; and members of one airline’s airport lounge plan will have access to the lounges of the other. “Continental intends to transition from SkyTeam to Star Alliance in a customer-friendly way, permitting its customers to redeem their OnePass miles on SkyTeam member airlines, and SkyTeam customers to redeem their frequent flyer miles on Continental, during a reasonable transition period,” Continental said. Meanwhile, Air Canada (also a Star Alliance member) and Continental announced they have reached an agreement in principle to begin a similar partnership of code-sharing, frequent flyer reciprocity and mutual lounge access, subject to regulatory approvals.