United Drops US Airways Deal, Woos Continental

CEO says UAL 'very close' to Continental merger
By Matt Cantor,  Newser User
Posted May 30, 2008 7:15 AM CDT
In this Jan. 16, 2007 file photo, Continental Airlines jets parked at gates at George Bush Intercontinental Airport in Houston, Texas.    (AP Photo/David J. Phillip, File)
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(Newser) – A proposed merger between United Airlines and US Airways is on hold again, the Wall Street Journal reports. United’s CEO told his US Airways counterpart that his airline is close to a deal with Continental, a merger that would be less costly and wouldn’t face as much antitrust scrutiny as a United-US Airways deal, the Journal notes. United’s revelation follows rejection from Continental last month.

United CEO Glenn Tilton said he was "very close” to merging with Continental, which also has weighed joining forces with American Airlines. The suspension of the United-US Airways talks ruffles expectations that April’s Delta-Northwest merger would spark more deals among major carriers. Sky-rocketing fuel costs have roiled the industry.