Got this from the source stated at the bottom of the article. Sorry for posting the whole thing, but I could obtain a link for just the article.

News for 'LUV' - (=DJ Air Canada, United to Form Revenue-Sharing Venture)

  By Caroline Van Hasselt

  Of DOW JONES NEWSWIRES

  TORONTO (Dow Jones)-Air Canada (AC.B.T), Canada's largest airline, said Thursday it has formed a revenue-sharing joint venture with the newly merged United Continental Holdings Inc. (UAL) that allows them to combine U.S.-Canada transborder flights.

  The venture enables Air Canada to offer consumers many more routes to U.S. via United's presence in 210 U.S. airports. Air Canada serves just 59 U.S. cities. For its part, Chicago-based United, which serves 16 Canadian cities, will be able to tap into Air Canada's domestic network of 59 communities. The airlines, both Star Alliance partners, plan to launch their venture in early 2011.

  "It's a merger with all the revenue and marketing benefits without the cost benefits," says Ben Smith, executive vice president of commercial sales at Air Canada, in an interview. "We're looking to optimize and to act as one carrier in schedules, pricing and sales. That's exciting because United has an incredibly powerful sales force in the U.S."

  The venture will "generate substantial service and pricing benefits" for consumers traveling between the two countries, the airlines said in a statement. Their pact comes as Air Canada rival WestJet Airlines Ltd. (WJA.T) tries to find a U.S. code-share partner with a non-Star Alliance member after Southwest Airlines Co. (LUV) terminated a two-year-old code share deal that never got off the ground. It may also spell trouble for closely held Porter Airlines Ltd. as Air Canada and United both have slots at the Billy Bishop Toronto City Airport, where Porter has monopolized service.

  "It points out the advantage that Air Canada has by being a member of the Star Alliance," says Chris Murray, an analyst at Toronto-based PI Financial Corp. The new venture "makes their networks flow more efficiently and may stimulate traffic on certain markets."

  Montreal-based Air Canada and United already have antitrust immunity and sell tickets on each other's flights. Their proposed venture still requires regulatory approval.

  Air Canada, Continental Airlines Inc. (CAL), Deutsche Lufthansa AG and United won antitrust immunity from the U.S. Department of Transportation in July 2009 to form a transatlantic joint venture, called Atlantic Plus-Plus, which allows them to pool their revenue and coordinate airfare and routes more closely.

  Through their membership in Star Alliance, the airlines already sold seats on one another's flights. The venture lets them share sales and operational staff, as well as provide customers with more international destinations and seamless traveling, enabling them to compete more effectively against rival accords between members of the SkyTeam alliance.

  In a speech at International Civil Aviation Organization in Montreal last week, Air Canada Chief Executive Calin Rovinescu said he believes joint ventures "will be the way of the future" for the airline until foreign-ownership rules are relaxed.

  UAL Corp. and Continental Airlines Inc. completed their $3.2-billion merger on Oct. 1, forming the world's largest airline, called United Airlines.

  In Toronto Thursday, Air Canada class B shares are off 3 Canadian cents to C$3.08. In New York, United is up 64 cents to $25.61.

  -By Caroline Van Hasselt; Dow Jones Newswires; 416-306-2023; You need to be a member to view our links.

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  (END) Dow Jones Newswires

  October 07, 2010 14:46 ET (18:46 GMT)

  Copyright (c) 2010 Dow Jones & Company, Inc.- - 02 46 PM EDT 10-07-10

Source: DJ Broad Tape