Airline News: Continental spurns United

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Continental has decided not to merge with United. The airline's directors announced on their website on Sunday that they felt that United's financial problem could put their company's "cultural, operational and financial strengths" in peril. Continental will instead try to ally itself informally with American Airlines and British Airways.

United and US Airways will now be sorely tempted to merge. There is pressure to reduce competition to help drive up airfares to levels that cover the costs of jet fuel. The cheapest average airfare has risen 26 percent so far this year, according to Farecompare.com, which tracks ticket prices.

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