<B> CO-NW Moves Forward</B>
By Jay Campbell
After the U.S. government all but stepped aside from the regulatory review of the Continental Airlines-Northwest Airlines marketing alliance, the two carriers last month wasted no time in announcing a slew of new services they will provide as part of the new relationship.
Vastly improving their positioning in CRS displays, for example, the carriers will begin accepting codeshare bookings Dec. 12 for 850 flights to 95 destinations.
Codesharing to and from Japan will begin Dec. 29 and will spread to other routes in January. Northwest initially will place its code on about 450 Continental daily flights serving 56 destinations. The "CO" code will appear on about 400 Northwest flights to 43 destinations.
Subject to regulatory review, the airlines yesterday began allowing frequent flyer reciprocity. Members of one frequent flyer program may request award travel from the other beginning Feb. 1 for travel beginning March 1. In terms of reciprocal lounge access, members in Continental's Presidents Club or Northwest's WorldClubs now are eligible to use the other's airport clubs. Internationally, reciprocal privileges are available to members who are traveling in CO's BusinessFirst, or Northwest's World Business Class or First Class.
Initiation of the alliance follows Northwest's planned acquisition last month of a majority voting interest in Continental (<I>BTN,</I> Nov. 2). Over eight million Continental shares were deposited into a voting trust and will be voted in the same proportion as the votes of other stockholders (with the exception of major transactions such as mergers) during the six-year term of the voting trust, plus an additional four years. Contrary to the initial agreement, Northwest will not have a designee elected to Continental's board. After the 10-year period, Northwest will have a majority voting interest in Continental, subject to the outcome of a lawsuit filed last month by the U.S. Department of Justice.
"We are pleased that this transaction has closed so we can turn our full attention to the successful implementation of our global alliance with Northwest," said Continental chairman and CEO Gordon Bethune. "The corporate governance agreements we have struck with Northwest gives Continental a decade of independence. Our customers soon will benefit from more destinations, more frequencies, better connections and a better frequent flyer program as a result of our alliance."
Continental and Northwest announced the investment and the alliance--and Continental announced some major changes to its OnePass frequent flyer program--in quick succession on Nov. 20. The two carriers were anxious to launch an alliance that would keep them competitive with Delta-United and American-US Airways. It was the CO-NW alliance, in fact, that sparked the other two domestic pairings when it was announced earlier this year (<I>BTN,</I> Feb. 23). But because of the investment by Northwest, the two carriers until now were hamstrung by regulatory review.
Continental's OnePass loyalty program changes, effective March 1, include a new Platinum Elite level that earns bonus miles at a rate of 125 percent and unlimited confirmed upgrades from any paid fare, unlimited companion upgrades, capacity-free rewards at reduced mileage levels, guaranteed reservations with every full-fare coach ticket and more; a lower mileage level for a free domestic ticket during the off-peak periods of Sept.-May and June-Aug.; 20,000 miles; more confirmed upgrade opportunities for Elite members; and the elimination of black-out dates for EasyPass rewards.
"By lowering the redemption level for domestic off-peak travel rewards, we've made it even easier for people to travel for free using their frequent flyer miles," said Bonnie Reitz, Continental Airlines' senior vice president of sales and marketing.