Continental CEO Larry Kellner says his airline won't hesitate to jump into the industry consolidation fray if necessary, but has no immediate plans to do so.

"We like our position as the industry stands today," Kellner said last week. "But I suspect that as we go forward, things will change" as a result of consolidation or further increases in fuel prices.

Continental is "paying attention" to merger talks between Delta and both Northwest and United, he said. None of the three airlines have publicly acknowledged talks. But House Transportation Committee Chairman James Oberstar, D-Minn., this week said Northwest executives have told him of ongoing merger talks with Atlanta-based Delta. Delta is also interested in United as a possible partner.

Kellner, who spoke with analysts and reporters on an earnings call, said his carrier, the nation's fourth-largest, currently is well positioned.

Years of higher-than-average growth, particularly in international markets, have made it the most profitable of the conventional network airlines, and the second most profitable in recent years, behind only discount king Southwest Airlines. But the possible combination of Delta with either United or Northwest would create a new No. 1, and could trigger further consolidation.

Kellner also said he's seen no clear evidence that a slowing U.S. economy is cutting demand for air travel. "We're not seeing a slowdown, based on our current booking level," he said. Holiday travel demand was down a bit, but he said it's not clear if it was because of a softening economy or the fact that Christmas and New Years Day each fell on a Tuesday.