UAL Corp.’s United Airlines and Continental Airlines Inc. will form an alliance to book seats on each other’s planes and create joint ventures for overseas flights. Their shares surged the most since January.

Continental also will join United’s Star marketing alliance and seek approval to set international fares and schedules with carriers including Deutsche Lufthansa AG, the airlines said in a statement yesterday. Continental will leave the SkyTeam alliance.

The accord brings together two airlines that couldn’t agree on a merger in April. United, the second-biggest American carrier, and no. 4 Continental may get most of the benefits of a tie-up while skipping the struggle of meshing labor groups and fleets.

“Alliances can work better than mergers in raising revenues and reducing costs without the integration, regulatory, and labor headaches,” a Standard & Poor’s analyst in New York, Jim Corridore, said in a note to investors. He rates UAL as “buy” and Continental as “strong buy.”

The alliance agreement grew out of merger talks between the two airlines that ended when Houston-based Continental said on April 27 it preferred to remain independent. Continental said then it might exit SkyTeam, whose members include merger partners Delta Air Lines Inc. and Northwest Airlines Corp.

UAL climbed $1.56, or 24%, to $8.11 at 4 p.m. New York time in Nasdaq Stock Market composite trading for the biggest jump since January 10. Continental rose $2.15, or 16%, to $15.59.

The advance by Chicago-based UAL led gains among all 14 carriers in the Bloomberg U.S. Airlines Index. The index was up 9.6%, also the most since January 10. UAL is this year’s worst performer in the index, tumbling 77%. Continental has plunged 30%.

Under the agreement, passengers will be able to earn and redeem frequent-flier miles on both carriers, and use the airlines’ airport lounges. The first overseas joint venture would involve trans-Atlantic flights among Continental, United, Lufthansa, and Air Canada.

Both carriers would get access to more international travelers, who pay the highest fares. Continental now generates about half its revenue from flights outside America.

“Continental has a strong position in the Atlantic out of Newark and they’re very strong out of Houston to Latin America,” Michael Roach of consulting firm Roach & Sbarra in San Francisco said. “Those are both weak spots for United. United’s and Continental’s domestic routes fit together pretty well.'”

United and Continental also plan to cooperate on some purchasing, information technology and facility use, the airlines said.