Continental Airlines joins Star Alliance

Carrier says passengers get more options, airline more places to expand

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updated 11:59 a.m. ET Oct. 27, 2009

NEW YORK - Continental Airlines on Tuesday officially joined the Star Alliance, a move it says will give passengers more options and the airline more places to expand.

The Star Alliance is the world's biggest airline grouping, with 25 members; including United, US Airways, Lufthansa and Air Canada. Continental was a member of the SkyTeam alliance, but left over a year ago when two other major carriers in the alliance — Delta and Northwest — said they would merge.

Speaking to a group of reporters in midtown Manhattan Tuesday, President and Chief Operating Officer Jeff Smisek said the merger relegated Continental to "junior partner status" and prevented it from having the kind of input it wanted in an alliance.

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Smisek said that with the Star Alliance's wide reach, the change will give passengers many more destination options through connections with other carriers. He estimated that the move to Star will bring in about $100 million a year in added revenue.

Continental is the only major carrier ever to switch membership in an airline alliance. Most airlines join these groups to share pricing and scheduling information. Carriers can also sign agreements, called code shares, within these teams to cooperate on route schedules and to combine some marketing and operations.

Continental on Tuesday signed code-sharing deals with four Star members — United, Lufthansa, Air Canada and UK-based bmi (also known as British Midland Airways.) It plans more deals with other Star partners in the coming months.

Smisek also said again that business travelers, which Continental focuses on, will eventually come back in greater numbers. He shot down the assumption that passengers will never again want to spend more money to fly in the front of the plane, but acknowledged that he's still not sure whether the market will return to what it was before the recession.

Continental, based in Houston, is the fifth largest airline in the world.