updated 5/28/2008 8:42:29 PM ET 2008-05-29T00:42:29

The CEOs of United Airlines and US Airways are scheduled to meet Thursday as talks aimed at combining the carriers progress despite concerns that threaten to scuttle the deal, according to two people briefed on the discussions.

The attempted pairing, which would create the world's largest carrier, faces numerous hurdles but is still possible despite published reports that the talks may have broken down, the people told The Associated Press on Wednesday.

One of the people, who did not want to jeopardize the talks and requested anonymity, said Glenn Tilton, the chief executive of United parent UAL Corp., and US Airways CEO Doug Parker will meet to discuss some of the issues holding up the deal and how to resolve them. The person said the location of the face-to-face meeting was undisclosed.

The other person confirmed the CEOs' meeting and said there is still key opposition to the deal within United despite management's longtime push for consolidation. That person was not authorized to represent the airlines publicly and spoke on condition of anonymity.

A key sticking point is labor complications that could delay any cost savings from a deal. US Airways still has not reached agreements with all of its unions following its 2005 combination with America West Airlines.

United declined to comment Wednesday. On Tuesday night, the airline declined to comment on a report by The New York Times that the talks appeared to have fallen apart. The Chicago Tribune had a similar report.

US Airways also declined to comment on those reports.

Shares of US Airways Group Inc. climbed more than 5 percent in after-hours trading Wednesday after The Wall Street Journal first reported that the CEOs planned to meet. The shares gained 22 cents in electronic trading after falling 36 cents, or 8.1 percent, in the regular session to close at $4.08.

UAL shares fell 27 cents, or 3.3 percent, to close at $7.91, then gained 9 cents after-hours.

Chicago-based United and Tempe, Ariz.-based US Airways have been in preliminary talks for months, but the pace picked up last month after Delta Air Lines Inc.'s acquisition of Northwest Airlines Corp. was announced and Continental Airlines Inc. said it decided not to pursue a merger with United.

Together, United and US Airways would surpass the combined Delta-Northwest as the nation's largest carrier, dropping AMR Corp.'s American Airlines from first to third.

Combined, United and US Airways have about 91,000 employees, more than 800 airplanes and annual revenues of $31.8 billion.

Copyright 2008 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.


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