LONDON (AP) -- The Wall Street Journal reported Wednesday that AMR Corp.'s American Airlines and Delta Air Lines touched on merger discussions during a preliminary talks about industry consolidation this week. If successful, an alliance would create the world's third-largest airline, behind United Airlines and American Airlines.
American was also considering buying Northwest Airlines, although no talks were under way, the Journal said. British Airways confirmed Wednesday it has entered talks with KLM Royal Dutch Airlines about a possible merger. Such deals would face significant regulatory hurdles in Europe and the United States. British Airways said in a statement that it would be making no further public comment "until there is anything material to say." British Airways cautioned that the talks were at a preliminary stage and might not result in a deal. Speculation about a deal between British Airways and KLM began after KLM called off a joint venture with Alitalia SpA in late April. On Monday, KLM confirmed that it wanted to find a new partner within a year. British Airways and KLM last attempted to merge in 1992, but the deal broke down over the issue of valuations.Analysts expect pairings in the airline industry to intensify after the recent announcement that UAL Corp., the parent of United Airlines, has agreed to acquire US Airways for $4.3 billion.