Source: Continental, United talks serious

DALLAS -- United Airlines and Continental are in advanced negotiations and could complete a combination quickly if Delta and Northwest strike a deal, according to a person familiar with the negotiations.

However, there are still significant issues yet to resolve, according to the person, who was not authorized by the companies to talk about the deal.

United spokeswoman Jean Medina and Continental Airlines Inc. spokesman Dave Messing declined to comment.

Delta Air Lines Inc. and Northwest Airlines Corp. have been intently discussing a deal for several weeks, according to people familiar with the situation. But issues such as combining work forces remain obstacles.

The prospects for an imminent deal seemed to improve Thursday when Air France-KLM, the world's largest airline by revenue, said it was considering investing in a Delta-Northwest combination.

Such a deal is expected to trigger more consolidation in the highly competitive airline industry, as rivals try to match or eclipse Delta-Northwest, which would become the world's largest airline.

United, owned by UAL Corp., and Continental must wait for the Delta-Northwest talks to run their course because Northwest can block any deal involving Continental. That veto power is the vestige of Northwest's one-time stake in Continental.

Analysts say United's strength across the Pacific would complement Continental's routes to Europe and Latin American and its hub in the New York area, where United is weak.