United Airlines' merger talks with US Airways have faltered and a deal is not expected anytime soon, say people close to the carriers, pushing the Chicago-based carrier to turn its focus to other strategic alternatives.

Sources said that talks have not ended, but that United, which is owned by UAL Corp, is continuing its code-sharing alliance talks with Continental Airlines Inc, according to Reuters.

Additionally, internal teams of senior executives, as well as external bankers and lawyers assigned to the project, have put talks on permanent hold.

United is also considering other possible changes to operations in order to survive as a stand-alone carrier while the airline industry is hard hit by record-high fuel costs.

The slowdown in talks is the second time in a month that United failed to reach a deal with a rival airline and putting the future of industry consolidation in question.

Additionally, internal teams of senior executives, as well as external bankers and lawyers assigned to the project, have put talks on permanent hold.

Meanwhile, Continental, which called off merger talks with United in late April, is also in advanced alliance talks with American Airlines AMR Corp and British Airways Plc.

Merger talks in the airline industry were heightened after Delta Air Lines Inc and Northwest Airlines Corp said in April they planned to merge and become the world's largest airline. The airlines sought to counter skyrocketing fuel prices, a weak economy and growing competition from European carriers as trade barriers fall on trans-Atlantic travel.

Shares of U.S. Airways plunged 8.11 percent to close at $4.08 and United parent UAL Corp. fell 3.3 percent to $7.91. Crude oil closed at $131.03 a barrel on the New York Mercantile Exchange, up $2.18, or 1.7 percent.

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