October 7, 2010 / 4:20 PM / 7 years ago

UPDATE 1-Air Canada-United Airlines in transborder deal

* Deal expands each airline’s network

* Seen coming into effect in early 2011

OTTAWA, Oct 7 (Reuters) - Air Canada ACa.TO ACb.TO said on Thursday it has agreed to a revenue-sharing joint venture with United Airlines (UAL.N) for flights between Canada and the United States.

The airlines said the arrangement will help them compete more effectively, while supporting substantial service and pricing benefits for passengers.

Air Canada said its transborder network of 59 U.S. cities will be bolstered by the United’s presence in 210 U.S. airports. United’s network of 16 Canadian cities will gain the 59 communities that Air Canada serves.

The airlines expect to launch the venture in early 2011.

    “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,” Air Canada Chief Executive Calin Rovinescu said.

    “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.”

    UAL Corp UAUA.O and Continental Airlines Inc (CAL.N) closed their merger on Oct. 1, forming the world’s largest carrier, called United Airlines. The airline is a unit of holding company United Continental Holdings Inc (UAL.N), which was formed through the $3.17 billion all-stock merger. ($1=$1.02 Canadian) (Reporting by Susan Taylor; editing by Peter Galloway)

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