Tags: US | Airline | Talks

Report: Continental, United in Deal Talks

Thursday, 15 Apr 2010 02:38 PM

Shares of Continental Airlines and the parent of United Airlines rose in afternoon trading Thursday after The New York Times reported that the carriers are talking about combining.

The newspaper's DealBook blog cited people briefed on the discussions, who said the talks were in early stages and could still collapse.

The news comes a week after reports that United and US Airways have been talking about combining. Analysts say a United-Continental combination makes more sense than United hooking up with US Airways because of Continental's strong international routes.

A spokeswoman for United said it doesn't comment on rumors. Continental Airlines Inc., which rejected a combination with United in 2008, also wouldn't comment.

Shares of Continental rose 71 cents, or 3 percent to $23.96 in afternoon trading. United parent UAL Corp. gained 88 cents, or 3.9 percent, to $23.24; while US Airways Group Inc. fell 5 cents to $7.37.

If they combined, United and Continental would become the world's largest airline by traffic, jumping over Delta Air Lines Inc. A United-US Airways combination would be smaller than Delta, which bulked up by buying Northwest.

Standard & Poor's analyst Jim Corridore reiterated his "Hold" rating on UAL shares after the New York Times report.

"We think there are merits to a combination of United with either party, but believe (Continental-United) would be a more compelling option, with less network overlap and a stronger international network," Corridore said.

© Copyright 2015 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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