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Air Canada plans partnership with Continental Airlines

Montreal-based Air Canada recently announced plans to partner with Continental Airlines, the fourth-largest carrier in the United States, to provide enhanced service to the American market. Canada's largest airline said the agreement in principle, which is subject to regulatory approvals, will provide customers a broader network of destinations, frequent-flyer benefits and lounge access.

Air Canada, trimming US service on lower demand and rising fuel costs, said the partnership may help fill more seats since it will help travellers book two-stage trips that involve a flight on each carrier, possibly steering more passengers on to Air Canada's US routes. The alliance is a way of responding to the high cost of fuel, confirmed Ben Smith, Chief Commercial Officer, Air Canada. Air Canada already has an agreement with United Airlines, which is a Star Alliance partner.

Continental announced in June this year its plans to join the Star group after exiting its current partnership with Sky Team. The transfer could take months to complete because Continental can't terminate its contract with Sky Team until nine months after the closing of the proposed merger between Delta Airlines and Northwest Airlines.

Under the new partnership, Canadian travellers will have access to more destinations in the Eastern United States through Continental's hubs in Newark and Cleveland. Enhanced access to Southern US, Mexico and Central America will be directed through its Houston hub. Continental has said its route network has little overlap with US. Air Canada has also signed a framework agreement with Continental, United Airlines and Lufthansa to create a transatlantic Joint Venture to provide service to Africa, India, Europe and the Middle East.

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