United Airlines and Air Canada to Form Revenue-Sharing Joint Venture
Air Canada and United Continental Holdings, Inc. on Thursday announced that the airlines have agreed to form a revenue-sharing joint venture.
The enhanced partnership on United States-Canada transborder flights as detailed in a Memorandum of Understanding is expected to generate substantial service and pricing benefits for consumers traveling between the two countries.
“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,” said Jeff Smisek, United Airlines president and chief executive officer.
“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,” said Calin Rovinescu, Air Canada’s president and chief executive officer. “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. Air Canada’s transborder network to 59 U.S. cities will be strengthened by United’s presence in 210 U.S. airports. Similarly, 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. Department of Transportation.