Continental Airlines has been officially welcomed into the Star Alliance having dropped its membership of the smaller Skyteam partnership, with COO Jeff Smisek likening the move to an upgrade from “economy to business class” during a press conference in New York.

The switch marks the first time a major airline has switched alliances and brings Continental closer to United Airlines about 18 months after merger talks ended between the two carriers. They will now work together on marketing and pricing in the next closest thing to a complete tie-up.

The move brings Continental out from under the shadow of Delta Air Lines and could mean a bigger piece of international revenue that is shared among team members.

The CEOs of the Star Alliance member carriers welcomed the alliance’s 25th member in a special ceremony.

Experts from both airlines and Star Alliance have been working together over the last 18 months in order to ensure the first successful transition of a major airline from one global alliance to another.

Continental has entered into bilateral commercial agreements with all of the existing 24 Star Alliance members. These agreements define the business relationships underpinning the Star Alliance brand and services, including reciprocal earning and redemption of frequent flyer miles.

In addition, Continental has signed code-sharing agreements with four Star Alliance members—United, Lufthansa, Air Canada and bmi. Code-sharing with additional airlines in Star Alliance will be implemented in the coming months. Code-sharing facilitates marketing of interline itineraries and creates operational synergies that improve the flight-connecting experience for travelers on itineraries involving more than one airline.

“Bringing Continental Airlines into Star Alliance has been a truly unique experience. This is the first time an airline has moved directly from one alliance to another and I would like to thank all those involved in ensuring a smooth switch,” said Jaan Albrecht, CEO Star Alliance. “Our travelers can now begin to appreciate the advantages Continental brings to the Star Alliance network, while Continental’s customers now enjoy enhanced alliance benefits.”

“Continental’s transition to Star Alliance is one of the most important strategic moves we have accomplished in my career at Continental,” said Continental Chairman and CEO Larry Kellner. “Our membership in Star Alliance positions us to deliver a broader network to our customers, and to achieve better business results and a stronger future for my co-workers, our customers and communities as a result of the benefits from participating in the world’s largest airline alliance.”

“Continental’s joining makes the Star Alliance network even more extensive, offering our customers the broadest global access and greatest choice of service,” said Glenn Tilton, chairman and CEO of United Airlines. “We welcome our partner, Continental, which brings tremendous value to our customers, our employees and the communities we serve.”

Meanwhile Air India is still working towards membership of Star Alliance. One of the main reasons for the delay in Air India’s induction is the reservation and other systems of Indian Airlines are yet be integrated with those of Air India, following their merger a few years ago.

“We have taken longer than others in joining the Star network but there are good reasons for the delay,” said Shirin Lalwani, executive director of Air India, who represented the carrier at the Continental ceremony.

“But we are working very hard to meet the minimum requirements and hope to complete the process by the second half of next year,” Lalwani said. Air India was invited to join the Star Alliance as far back as December 2007.