Continental Airlines Moves To Star Alliance As Part Of United Airlines Pact

June 20, 2008 11:38 a.m. EST

Houston, TX (AHN) - Continental Airlines has shifted membership to Star Alliance from Sky-Team as part of its new agreement with United Airines announced Thursday.

The agreement creates a seamless ticketing system between two of the largest U.S. airlines after talks the past month failed to result in a corporate merger.

Under the agreement, passengers of the two carriers would have the same frequent flier elite status and airport lounge benefits resulting from Continental's joining Star Alliance.

But it will take at least a year to implement since Continental has to first secure regulatory approvals and convince Sky-Team to release it from its fold.

The proposed shared network between Continental and UAL is similar to what Delta and Northwest had offered to Continental. The two airlines said they expect to jointly benefit from the shared network by improving profitability and cutting cost.

The signing of the agreement has prompted Standard and Poor to recommend UAL as a buy and Continental as a strong buy.