Air Canada and Continental ink code-sharing pact

Thu Jul 24, 2008 4:27pm EDT
 
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By John McCrank

TORONTO (Reuters) - Air Canada aims to expand its reach to new destinations through a partnership with Continental Airlines that will put the carriers' passengers on each other's planes while maintaining their frequent flier benefits, it said on Thursday.

The proposed code-sharing deal would offer Air Canada passengers more options for connecting flights while keeping its own operating and marketing costs down against a backdrop of soaring fuel prices, the country's biggest airline said.

It coincides with plans by Continental, the No. 4 U.S. airline, to join the Star Alliance group of carriers, which includes Air Canada, United Airlines, Lufthansa and others.

"Air Canada, United and Continental, between us, will have probably the most comprehensive network you can have in North America," said Ben Smith, executive vice-president and chief commercial officer at Air Canada.

"On another track, we are working with Lufthansa, United, Continental, to form a quadrilateral joint-venture trans-Atlantic alliance, and we've applied for immunity to start working on that."

The alliances come as the airline sector struggles to stay aloft amid record fuel prices and a struggling U.S. economy.

Air Canada said in June it would cut 2,000 jobs or 7 percent of its 28,000-member workforce. Continental said on June 5 it would cut 3,000 jobs, or about 6.5 percent of its 45,000 staff.

Code-sharing benefits airlines by allowing them to expand their networks while keeping costs in check, said Rick Erickson, managing director at independent aviation consultant firm RP Erickson and associates in Calgary.   Continued...

 
<p>Air Canada planes sit on the tarmac at Pearson International Airport in Toronto in this June 17, 2008 file photo. Air Canada aims to expand its reach to new destinations through a partnership with Continental Airlines that will put the carriers' passengers on each other's planes while maintaining their frequent flier benefits, it said on Thursday.REUTERS/Mike Cassese</p>