American Airlines has had early stage merger talks with US Airways and is in advanced talks for an alliance with Continental Airlines .
News of the talks comes in the wake of the talks of Delta Airlines and Northwest Airlines merger announced two weeks ago to become the worldÃ¢â¬â„¢s largest airline .
American Airlines and Continental are focusing on forming an alliance that could share passengers ,much like the Sky Team partnership that includes Air France-KLM , Alitalia , Czech Airlines , Delta Airlines and Northwest Airlines .
Alliances have proved beneficial in the aviation industry as profits are generated through marketing programmes and flight code- sharing without the headaches of combining operations .
Meanwhile , Continental is also in advanced talks with United Airlines for a complete merger . It is to be seen whether Continental will choose the merger or the alliance . United Airlines ,on the other hand , is also in serious merger talks with US Airways ,and will choose to merge with either Continental or US Airways soon .
Source : Gulf News