United/Continental Merger Deal Expected

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Numerous reports, all quoting unnamed sources, say the boards of United and Continental Airlines have agreed to a merger. The formal announcement is expected sometime today. The actual structure of the deal will also become more clear, but there is already some speculation that the resulting airline will be somewhat less than the sum of its parts. At least one analyst, Jim Burnley, President Ronald Reagan's transportation secretary, told Bloomberg News he believes the new airline will have to give up some lucrative routes.

Burnley said President Obama is likely to have a more skeptical view of the merger in terms of the effect on competition for European and Asian routes as well as access to Liberty Airport in Newark. "It's by no means going to get automatic approval," he told Bloomberg.