NEW YORK (CNNMoney.com) -- Continental Airlines Inc. and UAL Corp.'s United Airlines are nearing a deal to consolidate into the world's largest airline, the Wall Street Journal reported Thursday.
The commercial carriers' boards of directors are expected to discuss the negotiations through the weekend and announce the merger on Monday, said the Journal. The union would allow the company to overtake Delta Air Lines (DAL, Fortune 500), which merged with Northwest Airlines in 2008, as the world's biggest airline.
The deal could still fall through, as it did when the two airlines discussed combining in 2008 and Houston-based Continental backed out. But despite an earlier dispute on pricing, the Journal said discussions are still on track.
United boasts a stronger financial position this time around. Earlier this week, the Chicago-based company reported a first-quarter loss of $82 million, much narrower than the $382 million loss posted a year earlier. And revenue jumped 15% to $4.2 billion.
Thanks to an improved financial performance, United was expected to have more weight in the talks. Last weekend, the company pushed to base the deal on the closing price of its shares the day before an agreement is signed.
But since merger talks were unveiled earlier in April, United's parent company's stock has climbed more than Continental's, so the value of the deal would be lower for Continental's shareholders.
Continental decided to proceed with the talks and will consider a range of prices to resolve the disagreement, the Journal said.
The report said the combined airline will likely fly under the United brand and maintain its Chicago base.
Shares of UAL (UAUA, Fortune 500) were up 1.7% in after-hours trading; Continental's (CAL, Fortune 500) stock was up 0.8%.
Continental chief executive Jeff Smisek would lead the merged airline; UAL's chief executive will serve as non-executive chairman for two years, after which Smisek will also assume that role.
Representatives from both airlines declined to comment.
Earlier this month, United also discussed the possibility of merging with he Phoenix-based US Airways (LCC, Fortune 500). 
| Index | Last | Change | % Change |
|---|---|---|---|
| Dow | 12,454.83 | -74.92 | -0.60% |
| Nasdaq | 2,837.53 | -1.85 | -0.07% |
| S&P 500 | 1,317.82 | -2.86 | -0.22% |
| Treasuries | 1.74 | -0.01 | -0.80% |
| Company | Price | Change | % Change |
|---|---|---|---|
| Bank of America Corp... | 7.15 | 0.01 | 0.14% |
| Sprint Nextel Corp | 2.62 | 0.09 | 3.56% |
| Cisco Systems Inc | 16.33 | -0.06 | -0.37% |
| Chesapeake Energy Co... | 15.81 | 0.23 | 1.48% |
| Ford Motor Co | 10.60 | 0.01 | 0.09% |
|
The Senate hearing will focus JPMorgan's recent $2 billion trading loss, which Dimon announced earlier this month. More |
The offer for mail handlers is part of the Postal Service's plan to cut 150,000 jobs by 2015. More |
In the whirlwind of its IPO fallout, there has been a sort of glee in watching the company stumble. What's driving the Facebook-schadenfreude and what can the social network do about it? More |
One in six children in the United States is obese. These small businesses have found creative -- and lucrative -- ways to fight the childhood obesity epidemic. More |
In Harper County, Kansas, oil companies are offering farmers up to $1,250 an acre for the mineral rights that allow them to drill for oil on their property. More |
.
