United and Continental Now Have Reciprocal Upgrades But That Doesn’t Mean They’re Merging

Continental, Frequent Flier Programs, United

I suppose it’s inevitable. Any time two airlines move closer together, the speculation that it means they’ll merge picks up. Right now, the noise surrounding a United-Continental merger is deafening thanks to the announcement that elite members will now get upgrades on each airline. That doesn’t necessarily mean a merger is going to happen.

United and Continental, the Two-Headed Monster

Let’s start with the actual news here. United fliers will be given access to “premium” seating (better seats) in coach as well as upgrades on Continental. Continental fliers will get access to Economy Plus and upgrades on United. This begins “mid-2010.”

As usual, Continental has done a far better job communicating this change to its customers than United. Sure, they put out a joint press release, but other than that, United has been much less active in getting the news out. Continental, on the other hand, had a full FAQ on its website regarding the upgrades immediately and it posted details on FlyerTalk for Continental Elites. (There is now a page on United.com as well, and I eventually heard back from United’s PR team.)

In short, United and Continental elites are now basically treated the same regardless of which airline they’re on. This is good news for top tier elites, but for the entry level guys, this is just a further devaluation. I think entry level elite status can basically be considered a way to avoid fees and that’s about it now.

When people are flying on United, this is how upgrades will clear:

  1. United Global Services
  2. United 1K
  3. United Premier Executive
  4. Continental Platinum Elite
  5. Continental Gold Elite
  6. United Premier
  7. Continental Silver Elite

When people are flying on Continental, this is how upgrades will clear:

  1. Continental Platinum Elite
  2. United Global Services
  3. United 1K
  4. Continental Gold Elite
  5. United Premier Executive
  6. Continental Silver Elite
  7. United Premier

So as you can see, the United Premier and Continental Silver elites will be very unhappy about this. The Continental Gold Elites may be pretty unhappy as well since they’ll be bumped on their own airline by top tier United fliers. But remember, where the United top tier fliers are, the Continental top tier fliers likely are not. It’s not like American and United are doing this and having people battle it out in Chicago for upgrades.

I guess we can now see why United started allowing domestic upgrades for free. They wanted to align with Continental to implement this program.

Does this mean that the airlines are going to merge? Beats me. I’m sure United management would love to get that payday, but I don’t know that they are willing to completely walk away as they’d need to do. In my eyes, if this is going to be a successful merger, United needs to become a Houston-based airline.

But I look at moves like this differently than most. When airlines align their offerings closer and closer, it makes the actual benefits of a merger less than before. Sure, it would take some complexity and cost out of the system, but for the customer benefit, a merger isn’t necessary.

That doesn’t mean we won’t see a merger, of course, but it doesn’t mean it’s a done deal either.

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33 comments on “United and Continental Now Have Reciprocal Upgrades But That Doesn’t Mean They’re Merging

  1. I don’t think the issues are on the UA side, CO sees the death spiral @ UA, the labor issues, the cash issues, the management ones and probably doesn’t want to throw their reputation onto THAT brand….

  2. Some how it just doesn’t seem right that some UA members will see CO members go ahead of them on UA and the reverse on CO.

    Maybe when airlines do this they should just come up with a new ‘card’ system and merge both sets of members into one program for upgrade status. At least that way one airlines member doesn’t have to feel slighted if the other airline member gets ahead of them. Everyone would be in one program and it wouldn’t seem so bad if someone went ahead of you. Could work for an alliance group program also.

  3. I hope American Airlines doesn’t move to a similar upgrade system. I like the 500-mile sticker upgrades. It’s always nice to sit in the front, but there are flights where I don’t really *need to* and I save my upgrades for flights where (A) I need a better workspace, or (B) I just want to booze it up all the way to Los Angeles. Right now on American, the choice is essentially mine and I like it that way.

    =M=

  4. I hope a merger doesn’t happen. United has so many issues right now that I think trying to merge would just drag both airlines down…and I doubt UAL management would be willing to walk away completely. Time will tell.

  5. Does anyone remember how this compared to when Continental was in the SkyTeam alliance? I only flew Continental once as a Northwest/Delta Elite, but got a lot of the same benefits (the ones that matter, anyway: better seating at the front of Coach, free bags, etc.) but I can’t remember if they integrated their elite upgrades as well. (As a WorldPerks Silver, I didn’t see very many of those anyway. :P)

  6. AFAIK SkyTeam Elites never have had reciprocal upgrades to F on domestic itins, even though they have preferred seating and boarding. DL and NW Elites only got reciprocal U/Gs with the merger.

  7. I had the same thought and sent USAirways the question. the auto reply said I’d hear back in 7-10 days. hummmm.

  8. This is off topic, but I am surprised there hasn’t been an article on USAirways retrenching to hubs (PHX, CLT, and PHL,) + DCA. They are throwing LGA, BOS, and LAS off the train and shrinking, a pretty big move. Also leaves the door open for Jet Blue to expand in BOS. Just was curious on your take since you used to work for HP.

  9. I really hope this doesn’t happen, and I hope there is no United:Continental merger on the cards. I had the misfortune to fly a United codeshare flight on Continental on Sunday evening. Having read numerous semi-glowing accounts on this web-site of the ‘service’ that Continental offers, my flight from Houston to LHR was shocking. 2hrs late, crap food (like, really crap), AVOD that flattered but didn’t perform, no legroom and very uncomfortable seat.

  10. Bryan wrote:

    Any thoughts on whether USAirways will try to join this reciprocal arrangement?

    I highly doubt it. Remember, US Airways also wasn’t in the antitrust immunity application, so they’re sitting on the sidelines enjoying the benefits of the alliance but not jumping in fully.

    Randy wrote:

    This is off topic, but I am surprised there hasn’t been an article on USAirways retrenching to hubs (PHX, CLT, and PHL,) + DCA.

    Ah, you guys should watch my Saturday email. Often I don’t write about things here, but they’re over on BNET. Here’s the piece on wrote on this:
    http://industry.bnet.com/travel/10003916/us-airways-walks-away-from-las-vegas-slashes-jobs/

  11. I’m not on the FF side. But if Continental wants to get cozier e.g. merger level, they’d be smart to structure it as an asset sale. Although, I don’t know how that would work accounting wise.

    I’d surmise CO is with UA because they’re the best of a poor set of options, not because they really want to be..

  12. Many of the Bond holders and Shareholders will make the decision
    to merge. It all comes down to money. The lawyers will win again
    just like they do in BK’s. Now that the airline industry is in the crapper along with the economy, Consolidation is the only way to go if you want to survive. Ask BA/Iberia. Yields at all major carriers are ugly at best. I am wondering if the carriers didnt have all of these new fees,
    where would they be? As for the Projected new Prez of CAL, how do your determine when NWA/DAL is ahead of you, they already are with over 6ooo routes to choose from.

  13. @ Rob Marais: Delta and Northwest did not have reciprocal upgrades until shortly before the merger, but Continental and Northwest did: their relationship dates back to before either of them joined SkyTeam — before there even was a SkyTeam.

    I used to love Continental because they always got me where I wanted without connecting, but they stopped doing that after I moved out of New Jersey…

  14. @ Andrew:
    Continental and Northwest had reciprocal domestic upgrades, but it wasn’t because of SkyTeam; it was because of NWA’s “golden share” investment in CAL, which Northwest got in lieu of a merger back in the 1990s when the government balked.

  15. @ Randy:
    In my opinion, U.S. Airways is going down the drain – and actually, that’s the biggest take-away from this news of UAL-CAL alignment. Continental left SkyTeam to avoid being the “junior partner” in a post-merger world. Arriving at Star Alliance, CAL has immediately secured for its frequent flyers reciprocal privileges from United (i.e. Economy Plus seating) that United has specifically denied U.S. Airways elite members for years.

    Writing’s on the wall: U.S. Airways is not long for Star Alliance. I see Parker wooing American as a merger partner, but American’s results last quarter were so poor and U.S. Airways’ merger residue from the America West tie up still so raw that such a union would probably bring ruin.

  16. Why would CO waste money on a merger?

    UA is slowly teetering towards bankruptcy. When the wheels fall off in a year or so, there’s going to be a big fire sale. CO will be able to buy the parts of UA it wants without taking on the liabilities it doesn’t (i.e. management).

  17. Cranky,

    I’m really curious how this will truly impact upgrade opportunities. On Northwest, even as a silver, I did pretty decently in terms of upgrades… and remember, we were “competing” with higher up Continental elites for that privilege. And truth be told, I rarely flew on Continental, ’cause they wouldn’t give full elite qualifying miles to Northwest fliers who purchased the cheapo-fares on the internet.

    When these “alignments” happen, everybody thinks the other “team’s” fliers will come over in masses and steal upgrades from the “home” team. Why? Most people pick an airline based on the routes and schedules. One would think a United flyer would take a Continental flight only when CO offers a better schedule (ie nonstop.) And if that were the case often enough, wouldn’t that flyer be a member of CO’s program to begin with?

    When there is no clear “winner” then I would think people would gravitate toward the better loyalty program. And if a flier from Airline A takes an upgrade on Airline B, doesn’t that mean there is an open seat on Airline A?

  18. Dan wrote:

    When these “alignments” happen, everybody thinks the other “team’s” fliers will come over in masses and steal upgrades from the “home” team. Why? Most people pick an airline based on the routes and schedules. One would think a United flyer would take a Continental flight only when CO offers a better schedule (ie nonstop.) And if that were the case often enough, wouldn’t that flyer be a member of CO’s program to begin with?

    A bunch of good points, Dan. I tend to think that for the most part, people stick with the airline they know and love, especially domestically where there’s a lot of overlap. (Let’s not even touch international here since we’re talking about domestic upgrades.) That’s why I imagine that you won’t see too much pain for the super elites because they are probably with the airline they want to be with.

    But the lower level elites may very well be spreading out their loyalty on multiple airlines. For example, maybe someone in, say LA, flies to Newark and Houston a lot. Well, then Continental is great but they may spread their other travels on other airlines. Now they can fly United and get upgrades.

    Another example might be someone in a place like El Paso. Maybe they’re Continental loyalists going east but they fly Southwest or someone else going west. Now that they can get upgrades on United, they might switch their business that way.

    I’m not saying that I think this is going to be an avalanche, but lower level elites have trouble finding any upgrades these days. This may very well take the last seat on a flight on occasion.

  19. Dan wrote:

    One would think a United flyer would take a Continental flight only when CO offers a better schedule (ie nonstop.)

    After my recent experience, Dan, I’ll take a two-stopping United itinerary over a non-stop Continental.

  20. I sent United an e-mail last night to complain about the Continental part of my itinerary. This morning, I had a response and a $100 travel voucher from them by way of an apology for their crappy Star Alliance partner!

  21. Bobber wrote:

    Dan wrote:
    One would think a United flyer would take a Continental flight only when CO offers a better schedule (ie nonstop.)
    After my recent experience, Dan, I’ll take a two-stopping United itinerary over a non-stop Continental.

    Is this your first experience with Continental? I don’t fly them much since their west coast presence is tiny, but I hear generally good things about flying the airline. I wonder if you just had an off day.

  22. @ CF:
    Hi Cranky,

    First time in over 10 years. I’ll accept that the lateness, dodgy AVOD and dire food were an unfortunate one-off, but the seat comfort (or lack of) and leg room aren’t. I’ve never glorified the condition of UA interiors, particularly in Y+, but their seats are far more comfortable and leg-room much better than CO.

  23. Bobber wrote:

    First time in over 10 years. I’ll accept that the lateness, dodgy AVOD and dire food were an unfortunate one-off, but the seat comfort (or lack of) and leg room aren’t. I’ve never glorified the condition of UA interiors, particularly in Y+, but their seats are far more comfortable and leg-room much better than CO.

    Interesting feedback. I actually found that their older seats on the 737-300/500 aircraft were more comfortable than the newer ones. But I’ve never flown them internationally since there are nearly always better options from the west coast.

  24. On one of my few flights on Continental, I was on a 737-3T0. The seats were absolutely horrible. Of the full size jets, I think they were the least comfortable airline seat I’ve sat in. Sure a Saab 340 might have an annoying seat, but at least you’re not sitting in it for a long time.

  25. @ Bobber:

    I have to say, that’s pretty amusing. Year after year, Continental is ranked #1 among legacy carriers for customer satisfaction. United has for some time ranked at the bottom.

  26. @ CF:
    Continental Coach seats have less room than United Economy Plus. They have more room than United Economy Standard, though; where do you think that extra 6″ of Economy Plus legroom comes from?

  27. @ Dan:

    I happen to be CO silver elite (should be Gold for 2010) who lives in Denver, UA main hub. This is bad news for someone like me. It could be a reduction in flights, but I got an upgrade (on silver) nearly every flight I took in the first half of 2009. Even the few times I flew Northwest to Detroit this summer I got an upgrade 3 of 6 flights. Recently I only got an upgrade on 1 of 4 legs (DEN-IAH). I was 34th on the list on one flight. Now, I don’t know for certain that my drop on the list from almost certain upgrades to a snowballs chance in hell is due to United Global or United 1K being added, but the timing fits as these were flights after the implementation of Continental in Star Alliance. Could be that there are simply more Continental Platinum & Gold in Denver now, could be that I happen to take popular flights with elites. Who knows…

  28. Dan wrote:

    Cranky,
    I’m really curious how this will truly impact upgrade opportunities. On Northwest, even as a silver, I did pretty decently in terms of upgrades… and remember, we were “competing” with higher up Continental elites for that privilege. And truth be told, I rarely flew on Continental, ’cause they wouldn’t give full elite qualifying miles to Northwest fliers who purchased the cheapo-fares on the internet.
    When these “alignments” happen, everybody thinks the other “team’s” fliers will come over in masses and steal upgrades from the “home” team. Why? Most people pick an airline based on the routes and schedules. One would think a United flyer would take a Continental flight only when CO offers a better schedule (ie nonstop.) And if that were the case often enough, wouldn’t that flyer be a member of CO’s program to begin with?
    When there is no clear “winner” then I would think people would gravitate toward the better loyalty program. And if a flier from Airline A takes an upgrade on Airline B, doesn’t that mean there is an open seat on Airline A?

    I was pleasantly surprised to see that Continental fliers will earn 100% elite miles on UA. I used to split my miles between NWA and CO depending on who I was flying for two years until I realized that if I had just picked one program I could have made elite status for the year.

    So I do see this as one benefit that was lacking in the former alliance. If I am stuck on a UA flight at least I will be earning full elite miles. Unlikely I get my upgrade… but the elite miles should give me some comfort.

  29. Nicole wrote:

    Now, I don’t know for certain that my drop on the list from almost certain upgrades to a snowballs chance in hell is due to United Global or United 1K being added, but the timing fits as these were flights after the implementation of Continental in Star Alliance.

    Actually, the reciprocal upgrades haven’t started yet, so this must have just been a coincidence. Certainly as a CO elite in Denver, your chances will go down. There are a ton of elites there.

  30. @ Andrew:
    When CO/NW were working very closely together, one would get free upgrades on both carriers. OnePass members also got upgraded and continue to get upgrades on COPA, as Continental has ownership in the carrier. As a die hard CO Traveler (except the years I was traveling to SoAm out of Miami and had to fly AA) I think it is not a good deal for us. I am sure there are many UA customers that are going to be willing to fly on CO as opposed to UA even if they must connect, they know they are getting better service on CO!

  31. I’m a Continental Gold elite, and have been for ten years. When Continental left Skyteam for the Star Alliance, I wasn’t happy. I’m horrified of the announced merge with United. There’s a clear reason I choose to travel Continental over and over and avoid United like the plague. I’ve had bad service on Continental naturally, but I’ve never had good service on United. In addition, as someone with family in the airline industry, I now worry that post-merger, the new airline will find a way to screw the former Continental retirees by dumping their pension/retirement much like they did with their own retirees Its a shame. When United last went bankrupt, the government should never have stepped in and let the company liquidate. We’d all be better off if United just plain no longer existed.

  32. I hit CO Gold Elite this year. This was pretty easy flying from ORD to SFO every week. Since I didn’t have any status at first, my tactic for the year was this:

    1. Hit CO Silver flying on UA flights using my CO OnePass #.
    2. Use my one and only lifetime UA Status Match to match my CO Silver to UA Premier.
    3. Fly the ~9000 miles need to match the status.
    4. Book flights using my UA # to gain access to Economy Plus Seats.
    5. Change to my CO # when checking in, and keep the Econ Plus seat but board with Premier Exe.

    I did this because I was told that although I was now Premier, I would still need to fly ~43K to get Premier Execute. This to me is complete BS. I feel if I’m now Premier, I should only have to fly the normal amount from Premier to Premier Execute to gain that level.

    Instead of flying ~43K to get Premier Execute, I only had to fly another 25K to hit CO Gold. I did this mainly because there are so many 1K or GS out of SFO or ORD that I would never get upgraded anyways. At least now I can book Econ Plus AND board with Premier Exe (which is huge out of SFO or ORD where being in Econ Plus and only Zone 1 means you are pretty much swimming upstream for your bag). Plus Platinum on CO is pretty pointless from a STAR ALLIANCE perspective. Now I just have to hope that upgrades on UA will really go through “later in 2010” like they say.

    If not, oh well…I’ll just board as STAR Gold, sit in the back, and put my bag all the way up in Econ Plus so one of you Premiers get screwed :)

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