The airline company that runs Delta and Southwest Airlines is in talks to buy the parent company of American Airlines, which has been struggling with a massive loss.
The deal is expected to close by the end of this year, according to people familiar with the talks.
The airline is also seeking to buy Southwest’s smaller rival JetBlue for about $60 billion, according a person familiar with those discussions.
Delta is owned by Delta’s parent company, American Airlines Holdings Inc. Delta’s shares are up more than 20% in after-hours trading on Monday.
American’s stock rose about 3% in premarket trading to $76.60.
Southwest’s stock was up about 3.6% in early trading to close at $82.94.
Delta also has a $3 billion loan from the federal government to help cover its capital needs.
A deal with Southwest would make Delta the largest airline in the United States to purchase an airline.
Southwest, which also owns American, is under pressure as American Airlines’ market share has declined in recent years.
Southwest has said it wants to buy American Airlines to diversify its business.