Continental Air Aims To Join Star Alliance On Oct 27

Continental Airlines Inc. (CAL) said Wednesday that it expected to join the Star Alliance of carriers on Oct. 27, three days after leaving the rival SkyTeam grouping.

The Houston-based carrier has managed to maintain its schedule for the transfer - the first defection between the three alliances that dominate the global airline sector - despite a longer-than-expected approval process from U.S. regulators.

"We expect to begin participating in Star" on Oct. 27, the airline said in a message to members of its frequent-flyer program.

Continental opted to exit SkyTeam, which is led by Delta Air Lines Inc. (DAL), after the world's largest carrier by revenue successfully merged with Northwest Airlines, creating a fiercer competitor on domestic and international routes despite a loose marketing alliance between the trio.

The quick move into Star will allow Continental to leverage its new partners' route networks and frequent flyers at a time when airlines face a slump in demand, notably among high-margin business passengers.

The carrier was invited to join Star by UAL Corp. (UAUA), after it rejected a merger in favor of a commercial pact with the parent of United Airlines, a founder member of the alliance alongside Deutsche Lufthansa AG (LHA.XE).

It was also wooed by the third airline group, Oneworld, led by American Airlines' parent AMR Corp. (AMR) and British Airways PLC (BAY.LN), which is seeking to match the antitrust approval for cooperation secured by Star and SkyTeam.

-By Doug Cameron, Dow Jones Newswires; 312-750-4135; [e-mail]