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United and US Airways Said to Be in Merger Talks

In breaking news, the desk hears that US Airways and United Airlines may be holding merger talks.

They're knee deep in talks, says New York Times reporter Andrew Ross Sorkin on Fast Money. But we're several weeks away from a deal, he adds.

And I can't tell you we're going to get there. These things break apart.

The negotiations mark the latest efforts to consolidate the struggling airline industry. Both companies have been vocal in calling for greater consolidation within the industry to help prop up falling revenues, with United’s chief executive, Glenn F. Tilton, among the leading proponents for more mergers

This would be an answer to the Delta-Northwest combination, explains Sorkin, and an effort to bolster the balance sheet. Even as the economy gets better they still have little pricing power.

Structurally, US Airways will likely be the buyer however United will likely run the new company, adds Sorkin. Terms have not been set.

What's the trade?

I wouldn’t be surprised to see this deal happen, says Jon Najarian. And by taking capacity out of the system, it should make airlines stocks go higher.

If you're looking to trade airlines, I'd do it with JetBlue, counsels Gary Kaminksy.


Read More:

> United and US Airways Said to Be in Merger Talks


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Trader disclosure: On Apr 7, 2010, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Jon Najarian Owns owns call spreads in (PALM), (TXT), (AAPL); Jon Najarian Owns (AAPL) Call Spreads; Jon Najarian Owns (AKS), Is Short (AKS) Calls; Jon Najarian Owns (BAC) Preferred; Jon Najarian Owns (FCX), Is Short (FCX) Calls; Jon Najarian Owns (C) Preferred; Jon Najarian Owns (GS), Is Short (GS) Calls; Jon Najarian Owns (IP) Call Spreads; Jon Najarian Owns (MCD), Is Short (MCD) Calls; Jon Najarian Owns (MS) Preferred; Jon Najarian Owns (NYT); Jon Najarian Owns (PALM) Call Spreads; Jon Najarian Owns (RIMM), Is Short (RIMM) Calls; Jon Najarian Owns (WFC) Preferred; Jon Najarian Owns (WMT), Is Short (WMT) Calls; Jon Najarian Owns (PALM) Call Spreads, (TXT) Call Spreads, (AAPL) Call Spreads; Terranova Owns Gold, Oil; Terranova Is Short (XLY); Kelly Owns (FXE) Puts; Finerman's Firm Is Short (IYR), (IJR), (IWM), (MDY), (SPY); Finerman's Firm Is Long S&P Puts; Finerman Owns (AAPL); Finerman's Firm Owns (BAC), (BAC) Leap; Finerman Owns (BAC), (BAC) Preferred; Finerman's Firm And Finerman Own (CVS); Finerman's Firm And Finerman Own (JPM); Finerman Owns (USO); Finerman's Firm And Finerman Own (WFC) Preferred; Finerman's Firm Owns (WMT), (YUM), (MCD), (SKS); Funds Managed By Dennis Gartman Are Short S&P 500; Funds Managed By Dennis Gartman Are Short Euro; Funds Managed By Dennis Gartman Are Short Yen’ Funds Managed By Dennis Gartman Are Long Gold; Funds Managed By Dennis Gartman Are Long Natural Gas Trusts; Funds Managed By Dennis Gartman Are Long Copper; Funds Managed By Dennis Gartman Own (AAPL); Funds Managed By Dennis Gartman Own (DRI); Funds Managed By Dennis Gartman Own (FCX); Funds Managed By Dennis Gartman Own (GLD); Funds Managed By Dennis Gartman Own (PNRA); Funds Managed By Dennis Gartman Are Short (RIMM); Funds Managed By Dennis Gartman Are Short (SPLS)

For Deborah Weinswig
Citi Employees Own (WMT)
A Citi Employee Owns (JCP)
A Citi Employee Owns (LOW)
Citigroup Global Markets Or Affiliates Owns 1% Or More Of (SKS)
Citigroup Global Markets Or Affiliates Has Managed Or Co-Managed An Offering Of (KR), (SVU), (WMT) In Past 12 Months
Citigroup Global Markets Or Affiliates Have Received Investment Banking Compensation For Services Provided In Past 12 Months From (KR), (SKS), (SVU), (WMT)
Citigroup Global Markets Or Affiliate Received Non-Investment Banking Compensation In Past 12 Months From (HD), (JCP), (KSS), (KR), (M), (SWY), (SVU), (WAG), (WMT), (COST)
(KR), (SKS), (SVU), (WMT) Are Or In Past 12 Months Were Investment Banking Clients Of Citigroup Global Markets
(CVS), (HD), (JCP), (KSS), (KR), (M), (SWY), (SKS), (SVU), (WAG), (WMT),
(COST) Are Or In Past 12 Montsh Were Clients Of Citigroup Global Markets (Non-Investment Banking, Securities-Related Services)
(HD), (JCP), (KSS), (KR), (M), (SWY), (SVU), (WAG), (WMT), (COST) Are Or In Past 12 Months Were Clients Of Citigroup Global Markets (Non-Investment-Banking, Non-Securities Related Services)
Citigroup Global Markets Is A Market Maker In (CVS), (M), (COST)
Citigroup Global Markets And/Or Affiliates Has A Significant Financial Interest In Relation To (CVS), (HD), (JCP), (KSS), (KR), (LOW), (M), (JWN), (SWY), (SKS), (SVU), (WMT), (COST)
Citigroup Global Markets Or Affiliates Beneficially Owns 5% Or More Of (SKS)

For Richard Kang
Emerging Global Advisors Owns Jiangxi Copper Co. HK Listed Shares In Its ETFs
Emerging Global Advisors Owns China Telecom Corp. HK Listed Shares In Its ETF

For Ben Fulton
Invesco PowerShares Sponsors And Manages (XLYS), (XLPS), (XLES), (XLFS), (XLVS), (XLIS), (XLKS), (XLBS), (XLUS)


CNBC.com with wires

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JBLU
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USG1
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