• The New York Times, Wednesday, December 13, 2006 11:15 AM

United Airlines has initiated talks to merge with Continental Airlines, and their CEOs have met, people involved in the negotiations say. A merger of the two carriers would create the biggest domestic airline, with a combined value of $9 billion. Spokespersons for both United and Continental declined to comment on the report.

Any deal between the two airlines is far from imminent. A person with knowledge of the talks said United and Continental wanted to see how antitrust regulators would react to a possible merger of US Airways and Delta. Delta's management opposes the proposal and intends to file its plan to exit bankruptcy next week.

The discussions between United and Continental, though far from complete, could spur a wholesale realignment of the airline industry, analysts say. In other developments, AirTran Holdings, a low-cost carrier that competes against Delta, is expected to make an offer today for Midwest Air, a smaller airline in Milwaukee, a source said.

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