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\nAccording to Hunter Keay, a Stifel Nicolaus analyst, Investors would “react favorably” to a United and Continental pairing. Keay upgraded Continental from a “hold” to a “buy.”\n<\/p>\n
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\nBoth part of Star Alliance, Continental and United discussed merging in 2008 before Continental ceased talks.\n<\/p>\n
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\nIn previous weeks, news surfaced that US Airways and United are in discussion to create the No. 2 airline in the U.S., which would put Continental in an uncomfortable position, analysts have stated.\n<\/p>\n
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\n“We expect CAL to respond with a bid for UAUA in the near term, partly as a defensive maneuver to protect its immunized JV, but also because of synergy benefits from creating the world’s largest airline,” Keay explained in a letter on Monday.\n<\/p>\n
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\nNo comment was received from a spokeswoman from Continental, the United State’s No. 4 airline. Keay stated that he had no knowledge of any merger agreements or talk between Continental and United.\n<\/p>\n
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\nContinental shares shot up as high 5.3 percent to $22.67, while the Arca Airline Index rose 1.5 percent. The broader S&P 500 was up slightly.\n<\/p>\n
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