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Two Major US Airlines Discuss Possible Merger


Two of the biggest air carriers in the U.S., Continental and United, are reported to be discussing a possible merger.

United, the fourth-largest airliner in the U.S., and Continental, the nation's sixth-largest air carrier, have a combined value of more than $9 billion.

Sources close to the negotiations say talks between the two airliners intensified after U.S. Airways offered $8 billion in cash and stock as part of a potential merger with bankrupt rival Delta.

Both potential deals could lead to more consolidation between the major U.S. airlines that have been battling higher operating costs and stiff competition from low-cost carriers.

However, reports say any possible deal between United and Continental could be scuttled by Northwest Airlines, which has an financial agreement with Continental.

Glenn Tilton, the chief executive officer of United Airlines, is an advocate of consolidation within the aviation industry. His counterpart at Continental, Larry Kellner, says he wants his company to remain independent, but would also support a merger if the industry was heading in that direction.

Some information for this report was provided by AP and Reuters.

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