Rival US companies Delta Air Lines and Northwest Airlines have agreed to merge in a $5bn deal that would create the world's biggest carrier.
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The directors of the two companies agreed the stock-swap deal on Monday.
The combined airline, which will be called Delta, will have an annual revenue of more than $35bn and employ more than 75,000 staff.
The merger could trigger similar moves by other US carriers struggling with rising oil prices, correspondents say.
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.
Atlanta base
The merger agreed on Monday night 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 Officer Richard Anderson, will be based in Atlanta.
An unspecified number of job cuts are expected to reduce overlap in corporate and administrative departments, Delta said.
Before the merger, Delta had said it would eliminate 2,000 jobs this year.
(BBC)
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