(Reuters) - Continental Airlines, recently bought by United Airlines to form United Continental Holdings Inc (UAL.N), has scrapped plans to launch new service to Cairo, because of declining travel demand to Egypt, which is grappling with political unrest.

Continental said it has "indefinitely postponed" the planned service from Newark, New Jersey, to Cairo, which was to have begun on May 18.

Egypt is in the throes of political upheaval that saw massive public protests this year and the ouster of Hosni Mubarak as president in February.

"We're reacting to the decline in demand," a United Continental spokesman said Monday.

Shares of United were up 58 cents at $24.53 on the New York Stock Exchange.

(Reporting by Kyle Peterson, editing by Gerald E. McCormick)

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