Setting the stage for major airlines mergers in future, Delta Airlines and Northwest Airlines will come together in a $3.1 billion deal to create the world's biggest airlines.
The alliance, retaining the name and flag of Delta, comes in the backdrop of a weak economy and growing competition from Europe and with an aim to contain the rising fuel and operational costs.
To be headed by Delta chief executive officer Richard H Anderson, the deal will see through if it passes regulatory approvals.
The airlines, with a revenue of $35 billion and about 80,000 employees worldwide, expect that the merger would make them more competitive globally.
Expecting the next merger to be between the United Airlines and the Continental, the groundwork for which has been laid, Industry analysts warn that the consumers might have to pay higher prices for travel as the competition dwindles and discount airlines are put out of business.
The merger of the United and the Continental would create a further larger airlines.
Under the terms of the proposed all stock swap deal between Delta and Northwest, the latters shareholders will get 1.25 Delta share for each Northwest share they hold.
Experts say it could take up to one year for the two to completely merge the operations given the different systems they follow.
The board of new airlines will comprise of seven members from the Delta and five from the Northwest Airlines. chairman of Delta Daniel A Carp would retain his post.
The board would also have a representative of the Air Line Pilots Association.