AP source: United, Continental in alliance talks

The official said it would not be unusual for Continental to be considering alternatives, but that the British Airways-Continental-American talks are progressing and don't appear in jeopardy. British Airways publicly disclosed the talks April 30.

Bob Mann, an independent airline consultant based in Port Washington, N.Y., said he doesn't think an alliance between United and Continental is likely because it wouldn't go far enough to solve the carriers' cost and capacity issues.

"The United guys are very much heading in the direction of something that will really allow them to downsize the airline," he said. "We're talking about large capacity cuts. ... The alliance doesn't get to the point where you can really do the capacity-cutting."

The airlines are under more competitive pressure in the wake of Delta Air Lines Inc.'s pending deal to acquire Northwest Airlines Corp.

Combining United and US Airways would create a carrier rivaling the Delta-Northwest tandem for the title of world's largest airline.

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AP Business Writer David Koenig in Dallas contributed to this report.

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