United Airlines: Mergers Can Work

While there is nothing to indicate that another effort to merge the two airlines is close, Continental's move to Star is enabling some of the grunt work that would precede a merger, such as bringing employees together to work on code-share agreements, moving operations closer together in various airports, and making route synergies more evident to the carriers.

"We've had a strong start in terms of bookings, and the customer experience (improvements) are going be rolled out over the next six months," Tague said. "I think we're going to be surprised at the upside."

For instance, access to Central and South America through Continental's Houston hub will become available not only to United passengers in Chicago and the Midwest, but also to United passengers in California. "We have more frequent flier members in California than in any other state," Tague said. "California will represent a huge opportunity to flow traffic through to Mexico, South America and Central America."

In an early move to enhance the passenger experience, United and Continental said Tuesday that both carrier's elite status frequent fliers will receive unlimited, complimentary upgrades on domestic flights operated by both airlines when space is available, starting in mid-2010.

-- Written by Ted Reed in Charlotte, N.C. .

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