United Airlines and US Airways Group Inc are in advanced merger talks prompted by Continental Airlines Inc's decision this weekend to cancel similar talks with UAL, according to media reports.
A deal could be finalized within the next few weeks and could include meaningful capacity cuts, Reuters said, citing sources.
UAL, parent of United Airlines, is also considering expanding its global alliance network instead of striking a merger.
United and US Airways pushed ahead with their consolidation talks after Continental Airlines Inc. caught United by surprise with its decision to not to pursue a deal with the UAL Corp.-owned carrier.
Representatives of both airlines said they do not comment on rumors or speculation about consolidation.
We cannot comment on speculation or rumors, said Valerie Wunder, spokeswoman for US Airways.
Speculation rose regarding a possible United-US Airways deal after Continental Airlines Inc. said on Sunday said it would merge with another airline.
Continental, the Houston-based airline had reportedly been in talks with United to combine after Atlanta-based Delta Air Lines Inc. announced two weeks ago it would merge with Minnesota-based
Northwest Airlines in a $17.7 billion deal.
The airlines industry have been hard-hit with soaring fuel prices and a slowing economy, causing airlines to consider consolidation as a way to cut costs.
US Airways operates 3,500 flights per day to more than 230 destinations in the United States, Canada, Europe, the Caribbean and Latin America.