Continental joins United in Star Alliance

George Hobica, October 27, 2009
Fares from Washington DC:

    "There have been many successful mergers, just not in this business," Larry Kellner, CEO of Continental, is quoted as saying in the Wall St. Journal today. And while Continental isn't merging with United, today it joined United as one of the members of Star Alliance, a network of 23 airlines. This "increases the chance," says the Journal, that the third- and fourth-largest US carriers will "consider a merger down the road."

    Also increasing the chance of such a merger, of course, is that both airlines have shrunk, allowing them better to avoid scrutiny from anti-trust enforcers (since the combined entitty wouldn't have as large a market share). This is not to say that a merger will happen, but if it does, it would improve all airlines' pricing power.