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). 
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