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TEMPE, Ariz. (


) --

US Airways


said Thursday that it has broken off merger talks with


( UAUA).

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"We have recently held discussions with United Airlines regarding a possible combination between our two airlines," said CEO Doug Parker, in a prepared statement. "After an extensive review and careful consideration, our board of directors has decided to discontinue those discussions.

"It remains our belief that consolidation makes sense in an industry as fragmented as ours," Parker said. "Whether we participate or not, consolidation that leads to a more efficient industry better able to withstand economic volatility, global competition and the cyclical nature of our industry is a positive outcome."

Recent reports indicate that


(CAL) - Get Caleres, Inc. Report

is currently engaged in merger talks with United.

During Continental's earnings conference call Thursday morning, CEO Jeff Smisek said, "As you would expect of a responsible management team, we are examining Continental's options." He declined to comment further.

-- Written by Ted Reed in Charlotte, N.C.