Carriers Already Have Antitrust Immunity From The U.S. DOT

Air Canada and United Continental Holdings, Inc. have concluded a Memorandum of Understanding setting out the principles for a comprehensive revenue-sharing joint venture that would provide for an enhanced partnership on United States-Canada transborder flights, and generate substantial service and pricing benefits for consumers traveling between the two countries. On October 1, 2010, United Continental Holdings, Inc. announced the closing of the merger of United Air Lines and Continental Airlines, combining the carriers' global networks to create the world's leading airline which will operate under the name United Airlines.

"Working cooperatively with our partner Air Canada, we can create a more streamlined travel experience for customers traveling between the United States and Canada, providing more travel options and benefits while reducing travel times," Jeff Smisek, United Airlines President and Chief Executive Officer, said Thursday.

"This joint venture between United Airlines and Air Canada will provide many benefits and revenue synergies on this important market allowing us to compete more effectively," added Calin Rovinescu, Air Canada's President and Chief Executive Officer. "As founding members of Star Alliance, Air Canada and United have benefited from a close relationship, as have our customers through a simplified travel experience and loyalty rewards. By managing pricing, scheduling and sales through a stronger joint venture, the carriers will be better able to serve customers by offering more travel options."

The Canada-U.S. market is one of the largest air transportation markets in the world. The airlines say that  Air Canada's transborder network to 59 U.S. cities will be strengthened by United's presence in 210 U.S. airports, and United's transborder network to 16 Canadian cities will be strengthened by Air Canada's network serving 59 communities across Canada.

The joint venture is expected to come into effect in early 2011, subject to Air Canada and United Airlines making the necessary filings, obtaining regulatory approvals and finalizing documentation. The carriers already benefit from anti-trust immunity granted by the U.S. DOT.

FMI: www.ual.com, www.aircanada.com