United, Delta talking merger? 2 airlines deny any discussion

United Airlines and Delta Air Lines have been discussing a combination between the nation's second- and third-largest carriers that would keep the United name and the corporate headquarters in Chicago, according to an official with knowledge of the talks.

The reported talks come as all airline executives are wrestling with the implication of oil prices hovering close to $100 a barrel. That has sharply boosted jet fuel expenses — and accelerated a search for ways to cut costs, which typically are the result of airline takeovers.

Earlier Wednesday, Delta — which has a major hub in Salt Lake City — said its board established a special committee to work with management to review and analyze strategic options for the airline. Top executives have said recently they are trying to determine whether consolidation makes sense for Delta.

Delta issued a statement denying "published reports that it had engaged in merger talk with United." CEO Richard Anderson was quoted as saying, "There have been no talks with United regarding any type of consolidation transaction and there are no such ongoing discussions."

United called the report of recent talks "wholly inaccurate."

"We do not respond to wholly inaccurate statements made by people who claim to have knowledge when they clearly do not," spokeswoman Jean Medina said in an e-mail to the Deseret Morning News.

Medina did say that United believes, and has for the past four years, that consolidation is "necessary for the industry," but those decisions will be made "in the best interest of United, and we don't comment on the opinion of one shareholder, or the actions or hypothetical transactions proposed by others."

Officials at the Salt Lake City International Airport, home to Delta's second-largest hub, said Wednesday they were not aware of a potential Delta-United merger.

Nor was Mike Dunn, a local Delta pilot and former Utah spokesman for the Air Line Pilots Association, who said the combination would be bad news for Delta employees.

"I'm actually horrified to think that Delta would be swallowed up by United; it scares the crap out of me," said Dunn, a 16-year Delta pilot. "Every Delta employee should duck and run if that were to happen."

In airline mergers, the acquired company "always gets the short end of the stick," he said, particularly with a heavily unionized United workforce pitted against Delta's largely non-union employees.

Rumors of mergers with varied airlines have swirled since Delta filed for bankruptcy in 2005, and Dunn hopes this is simply another one of those speculations.