Chief executives from several of the world's largest airlines scurried between New York hotels and the Big Apple's airports this week, all to publicize what they consider to be a big deal: The defection of Continental Airlines to the Star Alliance.

The 16-months-in-the-making shift of Continental to Star from the SkyTeam alliance is only the most recent maneuver in the high-stakes global competition between the three airline groupings that now dominate the skies. When Japan Airlines teetered on the edge of collapse last month, Delta Air Lines and Air France-KLM were prepared to inject hundreds of millions of dollars into Asia's largest carrier. The goal: Woo JAL away from the Oneworld alliance and into SkyTeam, which is fronted by Delta and Air France. Meanwhile, American Airlines and British Airways, key partners in Oneworld, are a year into their third attempt to convince U.S. and European regulators to grant them antitrust immunity to share routes and collaborate on prices.

If these moves seem vaguely comical—airline alliances are jokingly compared to as everything from Mafia families to the political allegiances that drove World War I—think again. Less than full-on mergers but much more than casual corporate cooperation, airline alliances are now the driving factor in how carriers plan routes, price seats, create products and services, coordinate airport facilities, and even design the benefits of their loyalty programs.

Take Continental's move to Star, for example. One of Star's founding partners, United Airlines, says that Continental's arrival will mean $100 million in new revenue for United next year. Continental, meanwhile, juggled its route network in the run-up to its move to Star. Out were many flights to Atlanta, Detroit, Memphis, and Cincinnati, all hubs operated by Delta. In were new flights to places like Washington/Dulles, one of United's hubs. Continental is moving its operations at the airports in Tokyo, Beijing, Shanghai, Honolulu, Frankfurt, and Chicago to be closer to the gates and check-in counters of United and other Star Alliances partners. Continental says that it changed the fare codes on more than six million existing passenger reservations to align them with the rules, regulations, and designation of its new Star Alliance partners. Both United and Continental announced changes to their proprietary frequent-flier programs to make the rules and benefits look more consistent to travelers.

"Alliances mean tens of billions of dollars of decisions," one airline insider told me recently. At Star, he pointed out, control of the pricing on many code-shared flights of the Star partners is moving to Continental from United. "That means entirely new sets of eyeballs looking at how fares are set, what sales and prices to promote, and what the yield-management targets are."

Although airlines have been cooperating to some degree or another since the dawn of commercial air travel, the current wave of formalized, global alliances began in 1992, when British Airways forged a deal with what was then called US Air. The carriers called the then-unprecedented cooperation "the first major step toward the creation of a truly global airline group."

It never happened, of course. BA and US Air parted ways when British Airways and United Airlines formulated an alliance. The last physical reminder of that attempt to shape worldwide aviation is at New York's Kennedy Airport, where BA and United still share a terminal building rather than co-locating with their respective current alliance partners. Other airlines were pursuing other alliances too, and virtually all of those deals (with names like Wings, European Quality Alliance, and One Ticket) are also long gone.

These days, Oneworld estimates that 60 percent of the world's commercial airline capacity is affiliated by one of the three existing alliances and all but two of the world's 20 largest carriers are members of Star, SkyTeam, or Oneworld. The largest, Star, includes 25 airlines that range from household names like United, Lufthansa, and Singapore Airlines to regional carriers such as Blue 1 of Finland and Shanghai Airlines of China. After the loss of Continental, SkyTeam is anchored by Delta and the Air France-KLM conglomerate, but also includes carriers such as Korean Air, Alitalia, Aeroflot, and Kenya Airways. Besides American Airlines, British Airways, and Japan Airlines, Oneworld includes Cathay Pacific, Iberia, and Qantas.