Continental Airlines Inc., which is already in preliminary talks with United Airlines parent UAL Corp. about a possible merger, also discussed a potential tie-up with American Airlines parent AMR Corp., a person familiar with the situation said Friday.

Continental CEO Larry Kellner made his first public comments about his company’s discussions with United Friday in a recorded message to employees.

“We’re not in the final stages of negotiations with United Airlines. This has been reported by some media. Our preference is to remain independent if the industry stays as it is. If the landscape changes, we'll move quickly and aggressively to defend and protect the interests of you, our Continental co-workers, our shareholders, customers and communities we serve,” Kellner said quoted by the Houston Chronicle.

Analysts said United's strength across the Pacific would complement Continental's routes to Europe and Latin American and its hub in the New York area, where United is weak.

The talks between Continental and American come as Delta Air Lines Inc., now the No. 3 airline by passenger traffic and Northwest Airlines Corp., the fifth, are in the final stages of negotiating a merger agreement.  A combination between the two of them would become the largest carrier and significantly outdistance American in Traffic.

Delta, also discussed a combination with United in recent weeks but now is leaning strongly toward Northwest, the report said. An announcement about a merger between the two of them is expected early next week.

Many airline experts, including leaders of top U.S. carriers, say mergers are needed to help stabilize the volatile industry, which finally emerged from a five-year slump in 2006 after racking up $35 billion in losses.

Despite the latest rumors on possible merger plans, Continental spokesman David Messing, American spokesman Tim Smith and United spokeswoman Jean Medina declined to comment Friday.

A merger between Continental and American would make the merged company an even bigger player in the lucrative New York City Market, where American is strong at New York’s La Guardia and JFK airports and Continental has a hub in nearby Newark, N.J. said Daniel W. Atkins, president of Austin-based aviation consultant Atkins & Associates.

"But the downside is there is so much Texas overlap with the two hubs. And there really isn't any way to combine at one airport or the other the sort of hub operations you have at either Houston or Dallas," he said.

Shares of Continental rose 2.3% to $29.37, while AMR shares gained 2.8% to $15.22. UAL shares added 57 cents to $37.24, while Delta shares rose 2% to 417.39 and Northwest shares climbed 9 cents to $17.28.