AA already got its big domestic linkup - it was called TWA.

Obivously the new alliance will be formidable domestically, but it still cannot compete internationally with Star or oneworld. Even assuming this becomes a full Wings-SkyTeam merger, this alliance is still far weaker than the others when you get outside of Europe and NA.

Still, the domestic dominance may cause it to run afoul of regulators - although it does not appear that they have asked for anti-trust immunity, which would allow them to price in concert, but just the right to sell seats on eachother's flights, cooperate on FF progs, etc.

There are cynics out there who think the whole announcement was just a bluff to get the regulators to disapprove UA-US. Even if that's not true, this is only an announcement of intent, but the devil is in the details, and CO is notoriously difficult to negotiate with. It wouldn't surprise me at all to see egos kill the whole thing.