Delta & Northwest merger forms 'largest airline'

Rival US companies Delta Air Lines and Northwest Airlines have agreed to merge in a £2.5bn deal that would create the world's biggest carrier. The combined airline carrier will employ around 75,000 staff.

The new airline will take the name Delta, but the two pilots unions did not agree on the new terms of their contracts before the merger was announced. Analysts say the deal could prompt similar moves by other US airlines struggling with rising oil prices.

But the stock-swap deal, which was sealed a year after both carriers emerged from Chapter 11 bankruptcy protection, could face resistance from unions. Pilots for Northwest and the union acting on behalf of most of the carrier's ground workers said they would oppose the merger.

Airlines worldwide are suffering in the wake of a consumer slowdown in the US and Europe, making it harder to raise ticket prices against the fuel-price hikes. The merger will see Northwest shareholders receiving 1.25 Delta shares for each of their Northwest shares. The combined company, which will be headed by Delta Chief Executive Richard Anderson, will be based in Atlanta.

An unspecified number of job cuts are expected to reduce overlap in corporate and administrative departments - Before the merger, Delta had said it would eliminate 2,000 jobs this year.