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Continental-United tie-up: good, bad, and…?

Together with the proposed merger between [% 2550074 | | Delta and Northwest %], [% 2620006 | | Continental’s alliance with United %] will define the air travel landscape for years to come. And in particular, it will have a significant effect on how large numbers of travelers earn and redeem frequent flyer miles.

Once implemented—and it will take a year or more for all the pieces to be put in place—the Continental-United alliance will include code sharing, reciprocal frequent flyer program participation, and Continental’s switching its alliance membership from SkyTeam (which includes Delta and Northwest) to the Star Alliance (United, US Airways, etc.).

While the airlines haven’t disclosed a timeline, linking Continental’s OnePass and United’s Mileage Plus programs should be accomplished in six months (my best guess). Members of Continental’s program will then be able to earn and redeem miles for Continental flights, and members of United’s program will be able to do the same on Continental flights. Almost certainly United miles will count toward rso eaching elite status in Continental’s program, and vice versa. (Once Continental joins the Star Alliance, OnePass members will earn elite-qualifying miles on all Star Alliance flights.)

The immediate effect of the loyalty program link-up will be to increase the number of flights available to members of both programs for earning miles, and for taking awards. United has the larger network, so members of Continental’s program gain somewhat more than United members. But both programs benefit.

On the award side, United is generally perceived to be the more generous of the two carriers when it comes to making award seats available. So again, the tie-up would seem to favor OnePass members.

The two airlines’ programs differ markedly in their approach to elite upgrades. How those differences will be reconciled, if they will be, is a key question for the road warrior set.

Whereas elite members of Continental’s program receive unlimited complimentary upgrades, United elites must earn their upgrade certificates. With their closer marketing relationship, will United change its policy to approximate Continental’s, or will Continental emulate United? Either move would have an outsized impact, albeit on a relatively small number of travelers.

In a future blog post, we’ll consider the implications of the Continental-United alliance on two other affected airlines, American and US Airways.

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