Air Canada, United Airlines to form joint venture in 2011

[Kip Powick]

The Canadian Press MONTREALAir Canada and United Airlines have agreed to form a revenue-sharing joint venture for flights between Canada and the United States.

Canada's largest airline said the closer ties with United will take effect in 2011, and provide customers with "substantial service and pricing benefits."

By managing pricing, scheduling and sales, the carriers will be able offer customers more travel options, Air Canada president and CEO Calin Rovinescu said in announcing the joint venture.

He said the revenue synergies that will also allow Air Canada to compete more effectively.

United president Jeff Smisek said by working co-operatively, the two airlines will create a more streamlined travel experiences with increased travel options and reduced travel times.

On Oct. 1, United Air Lines completed merger with Continental Airlines to create the world's largest airline.

Air Canada is the world's 15th largest carrier, servicing 31 million customers annually to 170 destinations.

Rovinescu said the two founding members of the Star Alliance and their customers have benefited from a close relationship through simplified travelling and loyalty rewards.

The Canada-U.S. market is one of the largest air transportation markets in the world. Air Canada serves 59 cities in the United States and a similar number of communities in Canada.

United has a presence in 210 American airports and 16 Canadian cities.

The joint venture is subject to obtaining regulatory approvals. The U.S. Department of Transportation has already granted anti-trust immunity.

[AME]

Does this mean AC will start charging for checked bags?

[J.O.]

The "new" United had better improve drastically from the last time I used their service or this will not be a good thing, IMHO. Based on my last experience, I'd rather fly Ryanair, and believe me, that's saying something!

[skyline]

Does anyone know the financials now that United and Continental have merged? I know United is big and even bigger now but was never financially stable even in the best of times.

[dagger]

Does this mean AC will start charging for checked bags?

AC already charges for a second checked bag on transborder flights. Interestingly, Virgin America has just abolished the first checked bag fee for its Toronto flights, indicative, I suspect, of its problems getting customers on the two routes. A seat sale is one thing, but the only reason to abolish their first bag fee had to be that considered it to something that was sending customers to AC or other airlines.