Continental Airlines scuttled merger talks with United Airlines today and likely triggered other deals in the plunging industry. United's $357 million first-quarter losses and a plan to lay off 1,000 workers scared away Continental execs, the New York Times reports. Now United parent UAL will likely scramble to cut another deal before fuel prices force it into bankruptcy.
UAL will likely try a merger with US Airways, as Continental returns to talks of an alliance with British Airways and American Airlines. “Every U.S. carrier, including Continental, is under enormous pressure from record high fuel prices, a slowing U.S. economy and a weak dollar," Continental CEO Lawrence Kellner wrote in a letter to workers.