The World's Largest Airline, Continental and United to Combine

One of United's main attractions is its Pacific routes, which it bought from Pan-Am in 1985. It was already the biggest carrier in the U.S., and the Pan-Am deal made it a major international carrier for the first time. Northwest's Pacific routes were one reason Delta pursued that deal two years ago.

Continental jumped in size in 1987 by swallowing Frontier, People Express and New York Air.

Both airlines shrank to cope with the recession. United cut capacity 7.4 percent last year, and Continental shrank 5.2 percent.

And they've both been losing money. Continental reported a 2009 loss of $282 million as revenue plunged 17.4 percent to $12.59 billion. UAL lost $651 million for the year as revenue fell 19.1 percent to $16.34 billion.

The market capitalization for UAL Corp. on Friday was $3.62 billion, while Continental's was $3.12 billion.

Just two years ago, American Airlines was the nation's biggest carrier. First Delta surpassed it, and now United might. More than pride is at stake. Corporate travelers gravitate toward airlines with the most routes.

On April 8, when there was talk that United and US Airways were discussing a deal, American CEO Gerard Arpey said the company was "not in any way threatened" by the merger talk involving other carriers.

"We think we're in a very good position irrespective of what may happen," he said at the time.