United, Continental in early talks: source
DETROIT (Reuters) - United Airlines (UAUA.O) and Continental Airlines Corp (CAL.N) are in the "very initial stages" of merger talks, a source familiar with the matter said on Thursday.
Investment bank Goldman Sachs Group Inc (GS.N) is advising United on the talks, the person said.
A deal between Delta Air Lines Inc (DAL.N) and Northwest Airlines Corp (NWA.N) would speed up talks between United and Continental, the person also said.
Delta, the third-largest U.S. carrier, has reportedly been in talks with both Northwest and United parent UAL Corp.
The Wall Street Journal said on Thursday the carrier's talks with Northwest have picked up steam, adding that a deal could be announced as early as next week.
In November, Delta, which emerged from bankruptcy last spring after fending off a hostile takeover bid from US Airways Group Inc (LCC.N), said it had formed a special board committee to review its strategic options.
A Delta merger with Northwest would create the largest passenger airline in the world. Analysts had expected Continental and United to start negotiations of their own as Delta and Northwest drew closer to a deal.
Many airline experts, including leaders of top U.S. carriers, say mergers are needed to help stabilize the volatile industry, which finally emerged from a five-year slump in 2006 after racking up $35 billion in losses.
But soaring fuel prices and a softening U.S. economy are threatening to stunt the fledgling recovery.
(Reporting by Jui Chakravorty; editing by Jeffrey Benkoe, Richard Chang)
02/07/08 11:46 ET
DETROIT (Reuters) - United Airlines (UAUA.O) and Continental Airlines Corp (CAL.N) are in the "very initial stages" of merger talks, a source familiar with the matter said on Thursday.
Investment bank Goldman Sachs Group Inc (GS.N) is advising United on the talks, the person said.
A deal between Delta Air Lines Inc (DAL.N) and Northwest Airlines Corp (NWA.N) would speed up talks between United and Continental, the person also said.
Delta, the third-largest U.S. carrier, has reportedly been in talks with both Northwest and United parent UAL Corp.
The Wall Street Journal said on Thursday the carrier's talks with Northwest have picked up steam, adding that a deal could be announced as early as next week.
In November, Delta, which emerged from bankruptcy last spring after fending off a hostile takeover bid from US Airways Group Inc (LCC.N), said it had formed a special board committee to review its strategic options.
A Delta merger with Northwest would create the largest passenger airline in the world. Analysts had expected Continental and United to start negotiations of their own as Delta and Northwest drew closer to a deal.
Many airline experts, including leaders of top U.S. carriers, say mergers are needed to help stabilize the volatile industry, which finally emerged from a five-year slump in 2006 after racking up $35 billion in losses.
But soaring fuel prices and a softening U.S. economy are threatening to stunt the fledgling recovery.
(Reporting by Jui Chakravorty; editing by Jeffrey Benkoe, Richard Chang)
02/07/08 11:46 ET
