US Airways and United said to be in merger talks

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NEW YORK – United Airlines and US Airways are in merger talks that could lead to the creation of one of the world’s largest airlines, The New York Times reported on Wednesday.

The two US airlines were said to be “deep” in talks, but a deal had not yet been reached.

It would be the latest in a series of airline tie-ups prompted by the sector’s battle against debilitating high oil prices that were followed by a crippling recession.

Both companies have publicly called for consolidation of the sector.

Although details of the deal were not reported, United is a vastly bigger firm. Its parent company UAL Corporation is worth around 3.17 billion dollars versus US Airways Group’s 1.1 billion dollars.

Stocks in both firms surged in after-hours trading following news of the merger.

UAL shares were up nearly eight percent to 18.95 dollars a share, while US Airways stock was up by over 27 percent.