More US airline mergers are being predicted after Delta Air Lines agreed a $3 billion takeover of Northwest Airlines, a move which will create the country’s largest air operator.

The all-share offer has to secure regulatory approval although analysts do not expect it to hit unsurmountable obstacles with the competition authorities. The new airline will fly under the Delta flag, be based in Atlanta and employ 75,000 people.
 
Attention will now turn to Continental and United Airlines who are already thought to have held outline talks about a possible merger.

Airlines in the US are seen as under great pressure to consolidate as they face a range of challenges including high fuel costs, a weakening domestic economy, and a competitive threat from European operators. The leading US airlines are expected to report quarterly losses in the next few weeks.
 
Delta and Northwest both came out of bankruptcy last year. Richard Anderson, the Delta chief executive, said: “Together, we are creating America’s leading airline — an airline that is financially secure, able to invest in our employees and our customers, and built to thrive in an increasingly competitive marketplace.”

Delta believes that the takeover will generate $1 billion in annual savings but it has said that no hubs will be closed. The two operators have very little geographical overlap so the merger will initially take no capacity out of the system.

Although there is unlikely to be many regulatory objections, pilots at Northwest are opposed to the deal because of a failure to agree a seniority and pay structure with pilots at Delta, who have backed the deal. Delta pilots will get 3.5 per cent of the equity in the new airline. Delta has said that the two pilots’ groups will be merged into one. But Northwest pilots said that they would use “all resources available to aggressively oppose” the merger.

The takeover is likely to take months to complete.