CO cited the reason as not seeing an agreement in the "near future".

Here's the press release:

http://biz.yahoo.com/prnews/020703/daw016b_1.html

Press Release
SOURCE: Continental Airlines
Continental Airlines Discontinues Alliance Discussions With US Airways

HOUSTON, July 3 /PRNewswire-FirstCall/ -- Continental Airlines (NYSE: CAL - News) today announced that it has discontinued discussions with US Airways (NYSE: U - News) regarding the possibility of entering into an alliance agreement that would include codesharing and frequent flyer and airport lounge reciprocity between the two carriers.

Continental made the decision after it determined that an agreement would not be reached in the near future.

Continental currently has alliance agreements with Northwest Airlines, KLM Royal Dutch Airlines, Copa Airlines, Air Europa, EVA, Air China, Alaska Airlines, Hawaiian Airlines and Amtrak.

Continental Airlines is the fifth largest airline in the U.S., offering more than 2,100 departures daily to 120 domestic and 91 international destinations. Operating hubs in New York, Houston, Cleveland and Guam, Continental serves more international cities than any other U.S. carrier, including extensive service throughout the Americas, Europe and Asia. For more information, visit continental.com.

SOURCE: Continental Airlines

Well, hopefully this is an indicator that another alliance (United??) is close to completion...instead of this just being the first of announcements by all the parties.

Thank God it won't be CO! Let's hope the UA alliance is a go.

Actually I hope it CO & NW together

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dog food...whoops I mean snack

KLM Royal Dutch Airlines (http://groups.yahoo.com/group/KLMAirlines)
Virtual Airline Management Group (http://groups.yahoo.com/group/AirlineVirtualManagement)

*a QF here and an IB there, here a AA, there a BA, everywhere a ....?

At this point I'll take anything, but I, too, would have preferred CO to UA or *A. But something is better than what we have now-NOTHING!

A UA tie-in to Dividend Miles may be worse than the present. If that's done, I'd expect Qantas and Northwest's Pacific routes to be dropped from Dividend Miles.

That's worse, not better.

<font face="Verdana, Arial, Helvetica, sans-serif" size="2">Originally posted by Skylink USA:
A UA tie-in to Dividend Miles may be worse than the present. If that's done, I'd expect Qantas and Northwest's Pacific routes to be dropped from Dividend Miles.

That's worse, not better.</font>


Personally, I too would rather fly QF to Australia, but UA does have service to SYD, MEL, and Auckland. And from what I understand, NW WBC and UA's Business Class are pretty similar on the Asia routes. What would tip the scales in favor of a UA codeshare will be if miles count for status. And if US becomes a member of Star, that's even better. http://www.flyertalk.com/forum/smile.gif

Is it really possible that the 'alliance' being negotiated wouldnt include provisions status mileage accrual?

What's the benefit to us otherwise? Checked-through baggage? Common flight numbers?

It's Gordo putting the wood to them. They are whipsawing UA and CO to get the best deal, so he pulls out publicly, leaving them with UA, which now knowing it's alone, gets tough. Classic negotiating strategy,
that could level the playing field, and put CO back in. If nothing happens, they are no worse off.

Though I would never expect it, US and AA would be my dream alignment.

Absolutely glad, and hopeful, CO is permanently out of the picture...the availability of domestic 25K awards, even in the Texas area, is pathetic, and has been for years.

Give me AA or give me, well, good luck AA.