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United Announces Global Cooperation with Continental; Star Alliance Adds Continental

June 19, 2008 By: Kirk Cassels

Continental Airlines and United Airlines are cooperating to connect their networks and services worldwide for the benefit of customers. Glenn Tilton, chairman, president and CEO of United, and Larry Kellner, chairman and CEO of Continental, are meeting in Chicago this afternoon to sign a framework agreement outlining the system-wide alliance and cooperation principles between their carriers. In addition, Continental plans to join United in the Star Alliance to compete more effectively with the proposed joint venture involving certain SkyTeam members that was recently granted antitrust immunity.

"Continental's plan to partner with United and join the Star Alliance will provide substantial new opportunities for all of our customers," said Kellner. "In a network business, there is significant value gained from linking with larger networks to provide truly national coverage and expanded global reach, and exploring new ways to reduce costs and improve efficiencies."

Continental must first gain permission from the U.S. Department of Transportation (DOT) to join United (along with eight other carriers) in the already-established antitrust immunized alliance. This will enable Continental, United, Lufthansa, Air Canada and other immunized Star Alliance carriers to work closely together to establish trans-Atlantic and other international joint ventures so they can deliver highly competitive flight schedules, fares and service. Joint ventures are also planned for the Latin America and Asia/Pacific regions, involving Continental, United and other members of the Star Alliance. Both antitrust immunity and code-sharing are subject to receipt of approvals from applicable national authorities.

Meanwhile, in the United States domestic market, the two airlines will begin broad code-sharing to create itineraries using both carriers, as well as frequent flier programs, elite customer recognition and airport lounge reciprocity. Under code-sharing, customers will benefit from a coordinated process for reservations/ticketing, check-in, flight connections and baggage transfer. Frequent flier reciprocity will allow members of Continental's OnePass program and United's Mileage Plus program to earn miles in their accounts when flying on either partner airline and redeem awards on both carriers. Travel on either carrier will also count toward elite customer recognition. Similarly, each carrier's customers will have access to both Continental's Presidents Club network and United's Red Carpet Club network of airport lounges.

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