Source: www.abcnews.com
Author: David Koenig

Continental changes teams in the rivalry among the 3 big airline alliances

Continental Airlines has changed teams in the battle among three large alliances of global airlines.

The move gets Continental out from under the shadow of Delta Air Lines and could mean a bigger piece of international revenue that is shared among team members.

It will also pull Continental closer to United Airlines. The two talked extensively about combining last year before Continental walked away. Now they will work together on marketing and pricing in the next closest thing to a merger.

Continental customers will get more flights to choose from, and its frequent fliers will get a new roster of international airlines on which to earn and spend miles.

Continental officially switched Tuesday from SkyTeam, which is led by Delta and Air France-KLM, to the Star Alliance, which includes United, US Airways and Lufthansa. The move was set in motion last year, when Delta bought Northwest, another SkyTeam member, and became the world's largest airline company.

Being part of SkyTeam "worked for us when there were three equal airlines," said Continental President Jeff Smisek, referring to Delta, Northwest and Continental. But when Delta and Northwest combined, "it relegated us, in effect, to junior-partner status."

Airline alliances have grown over the past decades as carriers looked to expand their networks with partners while avoiding the need to hire more pilots and flight attendants to operate more flights themselves.

Continental is adding a few international flights to Frankfurt and Rio de Janeiro to link up with Star Alliance partners, and Continental officials said those trips would add jobs.

Continental's switch to Star was more than a year in the making, and was marked Tuesday with a lavishly produced ceremony at Newark Liberty International Airport, Continental's hub in the New York City area. The CEOs from many other Star members attended the event.

Glenn Tilton, the CEO of United, called it "a great day for Continental; it's a great day for my company."

Continental CEO Larry Kellner said the day after his airline broke off merger talks with United, Tilton called him and lobbied for Continental to join the Star Alliance.

Continental will bolster Star's presence in New York and its service to Central and South America. Continental, in turn, will benefit from United's lineup of flights to the West Coast and Lufthansa's strength in Europe.

"We are strong where they are weak, and we are weak where they are strong," said Smisek, who is set to become Continental's CEO on Jan. 1.

In July, Continental won approval from regulators for immunity from antitrust laws, which will let the airline work with its new Star partners on setting prices and schedules for many international routes. However, Continental and United won't be allowed to cooperate on pricing of flights within the U.S.

There are three major alliances of global airlines. Besides Star and SkyTeam, the oneworld team is led by American Airlines and British Airways.

It's rare for airlines to switch teams, and it takes more than paperwork to make it happen.

To make connections with partner airlines easier, Continental is moving its gates at 11 airports in cities including Chicago, Frankfurt, Tokyo and Beijing. And it's changing signs in airports and on aircraft to replace SkyTeam references with plugs for the Star Alliance.