Sunday, October 12, 2008

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United cuts deal to lower expenses

 




United Airlines and Continental Airlines will link their flights and mileage reward programs together as part of a broader partnership meant to combat steep fuel prices.

The airlines, which announced the deal Thursday, say the move will help them lower expenses, boost revenue and provide their customers with more flight options.

The agreement will "redefine the industry by going forward in a way that is beneficial for our airlines, employees, shareholders, customers and the communities we serve," Glenn Tilton, United's chief executive officer, said in a recorded message to employees.

"Our new planned partnership responds to the need for different thinking and solutions in an industry confronted by extraordinary and volatile fuel costs and dramatically changed market conditions."

United is the largest airline in Denver, capturing 50 percent of the market and employing 5,400 in the region. Continental offers about a dozen daily departures at Denver International Airport, primarily to its hubs in Houston and Newark, N.J.

The agreement comes after Continental backed out of merger talks with United two months ago, saying such a combination is too risky in this environment. United later ended merger talks it had been having with US Airways, citing similar reasons.

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