United, Delta Mull Possible Merger

United Airlines and Delta Air Lines have been discussing a combination between the nation’s second- and third-largest carriers that would keep the United name and the corporate headquarters in Chicago, according to an official with knowledge of the talks.

The reported talks come as all airline executives are wrestling with the implication of oil prices hovering close to $100 a barrel. That has sharply boosted jet fuel expenses — and accelerated a search for ways to cut costs, which typically are the result of airline takeovers.

Earlier Wednesday, Delta said its board established a special committee to work with management to review and analyze strategic options for the airline. Top executives have said recently they are trying to determine whether consolidation makes sense for Delta.

Delta issued a statement denying “published reports that it had engaged in merger talk with United.” CEO Richard Anderson was quoted as saying, “There have been no talks with United regarding any type of consolidation transaction and there are no such ongoing discussions.”

Financial details were not clear. But the talks involve United being the name of the combined airlines, the headquarters staying in Chicago and Delta’s Atlanta hub being an operational center for the two carriers, the official said. One possible scenario involves Delta’s Anderson being the chief of the combined airline, the official said.

Delta also has had talks with other airlines, the official said, without specifying which airline or the status of any such talks. United called the report of recent talks “wholly inaccurate.”