Merger Talk Sends Airlines Soaring

Updated from 1:49 p.m. EST

CHARLOTTE, N.C. -- Airline stocks closed sharply higher Thursday, as renewed speculation that consolidation is close at hand lifted the major U.S. carriers.

Delta(DAL Quote) primed the pump because its board will meet Friday in New York to discuss whether to give CEO Richard Anderson permission to begin talks with Northwest(NWA Quote) and UAL(UAUA Quote), the parent of United Airlines, said a person familiar with the situation.

Although hedge funds have repeatedly pressured Delta's board to consider a merger, "the combination of tighter credit, the darkening earnings outlook and rising fuel prices" may have made the board more receptive to the possibility than it has been in the past, the person said. ...