Continental Airlines and United Airlines are expected to announce Monday that they are merging to form the world's largest airline, experts familiar with the matter said.

UAL's board of directors has met on Friday while Continental's board met both on Friday and Sunday to discuss the deal.

These experts cautioned that negotiations could still fall apart as they did in 2008, when Continental finally backed away. But after a hiccup over pricing, the talks appear on track, they said. The combination CO and UA would form the biggest airline by passengers carried, a position currently held Delta Airlines.

United is much stronger financially than it was back in 2008. In fact, United posted a narrower first-quarter loss of $82 million this week, compared with a year-earlier loss of $382 million. Revenue rose by 15%, to $4.2 billion.

Continental already has agreed in theory to allow the combined airline to be based in Chicago, United's home base, an to retain the United name, according to experts.

Jeff Smisek, Continental's chief executive officer, would become CEO of the merged carrier while Glenn Tilton, UAL's CEO, would become non-executive chairman for two year, after which Mr. Smisek would take over that role too.

To be continued on Monday!