US Airways Ends Talks with United about Merger

US Airways Group Inc. said Thursday it has ended talks with United Airlines about a combination.

The announcement came after word that United and Continental Airlines Inc. have exchanged information as a prelude to a possible combination between those two carriers.

Industry experts have suggested that a United-Continental combination makes more sense in part because of the two carriers already cooperate with each other.

If United and Continental were to complete a deal, it would create the world's largest carrier, leapfrogging over Delta Air Lines.

In a memo to employees, US Airways CEO Doug Parker said that the carrier continues to believe in the merits of consolidation, but for the foreseeable future it intends to remain a standalone carrier.

"As I have said many times, it is not necessary for us to be direct participants in a merger because the entire industry benefits when consolidation occurs," Parker said.

US Airways shares fell 27 cents, or 4 percent, to $6.49 in morning trading. Shares of UAL, United's parent, rose 23 cents to $21.66

Earlier his month, British Airways PLC and Spain's Iberia SA signed a merger deal to create one of the world's biggest airline groups.

They expect the deal, which follows a provisional agreement reached at the end of last year, to be completed by the end of 2010.