United, Continental Alliance May Impact Airline Ticket Prices

Will the new alliance between United Airlines and Continental Airlines yield cost-savings for the airlines, or cost increases for the consumer? That's the question on many minds as the airlines start to link under the global Star Alliance.

Last week, Continental Airlines was granted permission from the U.S. Transportation Department to join United Airlines in the Star Alliance network. This means flyers on United and Continental flights will have more options for booking connecting flights and routes, but does it also mean added costs?

Reuters is reporting that the result of the two airlines will likely will see financial benefits after the completion of Continental into the network, but industry analysts predict that can only happen if the number of seats for sale is reduced.

Speaking to Reuters, airline consultant Robert Mann said, "[The airlines] will just cut capacity to the point where they can generate some pricing power."

In the meantime, Continental is ending its long-term relationship with the SkyTeam airline alliance, forcing some long-time Continental flyer to rethink their routes.

Readers: What do you think? Does the new Continental-United alliance affect your upcoming travel plans?

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