Report: Continental-UAL merger is off

CHICAGO, April 27 (UPI) -- United Airlines' parent, UAL Corp. of Chicago, Sunday failed to reach a merger agreement with Continental airlines, The New York Times reported.

United was reported close to making a decision on a possible merger with another airline, The Wall Street Journal reported earlier. However, The Times reported late Sunday that Continental officials said they had abandoned merger talks with United and Continental would remain an independent carrier.

Continental's decision came after UAL announced disappointing earnings and saw the price of its stock fall during the past week, the Times noted.

Since Northwest Airlines Corp. and Delta Air Lines Inc. announced their merger plan nearly two weeks ago, talks have intensified among other airlines that fear losing business if they don't join forces with another carrier, the Journal said Sunday.

"Everybody's talking to each other trying to figure out what the next chess move should be," Calyon Securities airline analyst Ray Neidl told the Chicago Tribune.

After holding in-depth talks with US Airways Group Inc., UAL reportedly had moved on to Continental Airlines Inc., reportedly with the intention of finalizing a merger by May.

Melding Continental and United would have created the biggest airline in the world, surpassing Delta-Northwest and American Airlines, which currently leads the industry.