United Airlines and Continental Airlines have held preliminary talks about a potential merger as consolidation in the airline industry heats up, a source familiar with the situation said today.
"Everyone talks to everyone all the time, but they renewed contact after the USAir and Delta situation emerged," said the source, who declined to identified.
Last month, US Airways. made an $8.7 billion takeover bid for rival Delta Air Lines, raising expectations of consolidation in an industry struggling with high fuel prices and competition from discount carriers.
The talks between United and Continental could be complicated by antritrust concerns and veto power held by Northwest Airlines, the source said. The carriers have yet to discuss price or timing of a deal, the source said.
"It's far from certain. At the moment - it's just talks," the source said.
United declined to comment. Fourth-ranked Continental could not be immediately reached for comment. Bankrupt carrier Northwest holds a so-called "golden share" in the airline, giving it the right to block mergers involving Continental.