Continental Airlines Inc. has
set a date for its long-expected divorce from the international SkyTeam alliance, saying Thursday that it expects to leave a partnership with Delta Air Lines Inc., Air France SA and others on Oct. 24 to join the rival Star Alliance.
With cross-border M&A limited in most of the developed world, airlines have gelled around three major international alliances in an effort to offer greater global connections and extract whatever efficiencies of scale they can muster. But Continental has never been free to seek out its own destiny internationally, tied as it was to Northwest Airlines Corp. by a so-called "golden share" Northwest held dating back to that company's 1990s-era investment in Continental.
The golden share led Continental first to align with Northwest and Dutch flag carrier KLM, and then to SkyTeam after Air France bought KLM and Delta bought Northwest. But Delta's deal for Northwest also allowed Continental to repurchase that golden share, freeing it to finally find its own deal.
Continental according to industry sources was courted not just by Star and SkyTeam but by OneWorld, an alliance led by AMR Corp.'s American Airlines Inc. and British Airways plc, as well. Houston-based Continental ultimately decided it was best teamed with Star, where it would join US Airways Group Inc. and UAL Corp.'s United Airlines Inc. in the U.S. and airlines including Lufthansa AG overseas.
The transition seems certain to fuel a new round of talk about an eventual Continental-United merger. The two companies held discussions last year after the Delta and Northwest transaction was announced, but Continental according to sources was scared off by lingering labor issues inside United.
Starting sometime after October, the two airlines will finally get an opportunity to see how compatible they are. -
Lou Whiteman
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