Just as all-business-class airline, EOS, files for Chapter 11 and crude oil prices shoot within a whisker of $120 a barrel, marking another record high, Continental washes its hands of formal talks with United Airlines’s parent company, UAL Corp. Bad timing – or does the Houston airline know something we don’t?

Abruptly ending talks with United Airlines parent UAL Corp., Continental Airlines Inc. said it would stay independent for the time being despite efforts by rival carriers to merge.

The Houston-based airline didn't disclose details of talks in its statement late Sunday and didn't name potential partners. But its move was seen as a rebuke to Chicago-based UAL, which has been trying to interest Continental in a marriage for years.

UAL had recently entered formal merger talks with Continental, said people familiar with the matter, giving UAL the impression that it had the inside track on striking a deal with one of the U.S. industry's healthiest carriers.

In a bulletin to employees, Continental Chief Executive Officer Larry Kellner said Continental has "significant cultural, operational and financial strengths" that "would be placed at risk in a merger with another carrier in today's environment."

UAL still is continuing merger discussions with US Airways Group Inc., according to people familiar with the situation.

In a statement, UAL Chief Executive Glenn Tilton said, "Consolidation is under way -- ensuring you have the right partner is everything. We will pursue all options to ensure a strong, sustainable future for our airline and will not shy away from the tough choices necessary to create value for our shareholders and benefit our employees and customers."

Continental's move removes one potential deal partner from an industry looking for answers amid soaring fuel prices and a softening U.S. economy. The cost of jet fuel has more than doubled to $3.71 a gallon as of mid-April from about $1.56 a gallon in October 2004, according to the federal Energy Information Administration.

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