United, Continental Partner, But Won't Merge

Airlines will share international flights, coordinate domestic bookings
By Ambreen Ali,  Newser User
Posted Jun 20, 2008 5:45 AM CDT
United Airlines first class passengers check in at San Francisco International Airport in this file photo. Continental Airlines says it is forming an alliance with United Airlines, instead of a merger...   (AP Photo/Paul Sakuma)
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(Newser) – United and Continental Airlines have forged a marketing alliance that will let them book each other’s seats, share miles and join international flights—but won't merge, reports the Wall Street Journal. The deal provides welcome cost savings in the face of surging fuel prices, but avoids the labor tensions and service disruptions that come with a full-blown merger.

"Alliances can work better than mergers in raising revenues and reducing costs without the integration, regulatory and labor headaches," an analyst tells Bloomberg. The agreement grew out of rocky merger talks, with Continental saying it wanted to remain independent. The value of both companies’ stocks leaped after the alliance was announced.