Continental & United Team Up For Wide-Ranging Marketing Alliance

Continental Airlines and United Airlines announced today that they had reached an agreement on a broad marketing alliance that would provide many of the same revenue benefits of a merger, but without financial and operational risks that have been made larger by the credit crisis and rising oil prices. The country's number two and number 4 airlines have been in talks about an alliance since late April.

Continental has been previously discussing a merger with United, but abruptly called all talks, stating that they'd be better off remaining independent. United had also been exploring a merger with US Airways, but called that off a month after Continental pulled the plug on their discussions.

As part of the agreement, Continental and United have agreed to link their networks and operations globally. Continental also agreed to join the Star Alliance, the world's largest group of airline partners, which United currently belongs to. In joining the Star Alliance, Continental will give up their membership with another airline group, SkyTeam.

The agreement also means the end of Continental's association with Northwest Airlines and Delta Air Lines. Continental currently shares flight codes and routes across the US and the world with these two companies, who agreed to merge with each other in mid-April.

Of course this alliance isn't 100% official yet - it will still require approval from federal regulators that will undoubtedly be closely scrutinizing the deal.

For consumers, this quasi-merger will mean that passengers eventually will be able to book tickets with either carrier, earn credit in both frequent flier programs, and redeem their miles with each carrier.