Video: Airline merger could mean higher ticket prices

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updated 5/3/2010 5:52:14 PM ET 2010-05-03T21:52:14

United Airlines agreed Sunday to acquire Continental Airlines. The new airline would surpass Delta Air Lines as the world's largest carrier.

The deal appears to be a good one for business travelers. United and Continental combined fly to 370 locations and have hubs in Houston, Chicago and Washington, D.C. They also fly to major cities such as Beijing, Tokyo, Rome and Munich.

The top executives of the new airline say that ample competition in its major markets will make boosting ticket prices for leisure travelers tough to do. Time will tell.

Here are some questions and answers about how the combination of the two airlines will impact travelers.

Question: So, will I be flying on United or Continental planes in the future?

Answer: The planes will carry the United name, but they'll have the Continental globe logo on the tail, and Continental's blue color scheme.

Q: What happens to my frequent flier miles?

A: The airlines say they will merge Continental's OnePass miles program with United's Mileage Plus. They haven't detailed their plans. But in past airline combinations, frequent flier miles from one airline were converted into miles on the other.

Ben Schlappig, a frequent flier who writes a blog called "One Mile At A Time," said the combination will travelers to put all their miles from both "banks" into one account. That puts the occasional traveler closer to rewards. A frequent flier whose combined miles add up to one million or more earns a nice perk: lifetime elite status.

But thresholds for elite status still have to be worked out. Schlappig said frequent fliers and business travelers have their own favorite perks at each airlines, so they'll be watching to see which ones stay. Upgrades at Continental are harder to get than on United, he said.

Frequent fliers for United can already redeem on Continental, and vice-versa.

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Q: So does this mean the airlines have combined? Can I use my United ticket on Continental?

A: Whoa, that plane is still at the gate. The two airlines will operate separately until the deal closes. They're hoping that happens by the end of 2010. They have an existing code-share agreement that allows them to sell tickets on each other's flights. That hasn't changed.

Q: This airline would be huge. Will it have a monopoly in some cities?

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A: On a few routes, yes. Right now United and Continental have the only nonstops from Cleveland to Denver, and from Cleveland to Washington. J.P. Morgan counted 11 overlapping routes that would be left with just one or two carriers. On most routes, though, there is competition from other airlines, many of them discounters. Continental and United said they have no overlap on international routes.

Q: I have a Chase credit card that earns United or Continental miles. What will happen to those cards?

A: Until the merger closes, nothing changes. It's a good bet the cards will be integrated after the merger. After Delta bought Northwest, Delta left behind Northwest's mileage card, issued by US Bancorp, in favor of American Express. In the case of United and Continental, both have cards issued by Chase. Airline miles cards have been very popular with consumers, and credit card issuers like them because the customers tend to spend more and to be loyal to the card.

AP Business Writer Stephen Bernard contributed to this report.

Copyright 2010 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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