Airlines shares up following merger talks

Shares in the airline industry gained yesterday following reports of merger speculation.

It is understood that United Airlines and Continental Airlines are in very early merger discussions while Delta Air and Northwest will probably announce a deal in the next fortnight.

UAL Corp, the parent company of United Airlines, are in the ‘very initial stages‘ of merger talks, according to a source close to the matter. It is believed that investment bank, Goldman Sachs, is advising United on the talks.

Shares in UAL increased 1.8% to $38.33 while Delta gained 1.6%, both on the New York Stock Exchange.

Furthermore, shares in Continental were up 5.3% to $30.31, shares in Southwest Airlines were up 5.5% to $12.61 and JetBlue Airways were up 9.6% at $7.20.

It is believed that a wave of mergers will hit the airline industry. Standard & Poor’s analyst, Jim Corridore, said shares in most US airlines increased as investors focused on expectations that the industry could benefit from capacity reductions that could accompany a merger.

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