United and Continental Join Forces – Will Hawaiian Go Next?

Unable or unwilling to reach terms for a complete merger of the two companies, United Airlines and Continental Airlines today announced a comprehensive plan for global cooperation. This agreement allows the companies to join forces without the the anti-trust issues associated with a merger.

On the surface this includes:

• Continental to join United’s Star Alliance
• Code-sharing agreement
• Shared lounges
• Combined facilities utilization
• Shared information technology
• Shared procurement

Not mentioned, but likely to be included:

A reduction in competitive services. This could reduce flights between the mainland and Hawaii and further raise fares.

My prediction:

It’s also a step towards Continental acquiring Hawaiian Airlines. I have long thought this would occur following the consolidation among the larger players.