Tags: US | Airline | Talks

Talks Deepen Between United and Continental

Tuesday, 20 Apr 2010 06:35 PM

 

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United Airlines and Continental Airlines are in the early stages of exchanging financial information that could lead to a deal to combine and create the world's biggest airline, people briefed on the talks said Tuesday.

United had been talking with US Airways about a combination, but speculation has increased that United is more interested in the larger Continental.

The exchange of information between United and Continental was confirmed Tuesday by two people who were briefed on the talks. They spoke on condition of anonymity because they were not authorized to publicly discuss the negotiations.

One person said bankers for United and Continental are discussing how to value the companies in a stock-for-stock swap.

That person said talks between United and US Airways have stopped for now with no firm date for starting again. However, the person stressed that United hasn't ruled out a combination with US Airways.

UAL Corp.'s United, Continental Airlines Inc. and US Airways declined to comment.

Another person briefed on the United-Continental talks said the two began exchanging information over the weekend. That job might be easier because the airlines considered combining in 2008, until Continental broke off talks.

A merger then was seen as risky because of soaring prices for jet fuel and weak balance sheets in the airline industry. Oil prices are lower today, U.S. airlines have built up cash reserves, and airlines have cut capacity, which should give them more power to raise fares this summer.

© Copyright 2014 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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