Delta and Northwest airlines Monday night put the finishing touches on a long-anticipated merger that creates the world's largest airline, officials said.

The boards of both companies approved the deal, following several weeks of working through thorny issues including pilot seniority.

The new airline, which would fly under the Delta name, would have a value of $17.7 billion and be based in Atlanta. Current Delta CEO Richard Anderson will head the combined company. Delta said it doesn't plan to close any of the two airlines' hubs.

The announcement came a year after the two carriers emerged from Chapter 11 bankruptcy protection. Both airlines are losing money again but are in much better shape than the four much-smaller airlines that have filed for bankruptcy or gone out of business in recent weeks.

The rising cost of fuel has been one of the biggest problems for the industry.

Atlanta-based Delta, with 7,000 pilots, is the world's third largest airline, while Northwest, with 5,000 pilots, is No. 5. The combination will vault the new Delta past American Airlines as the world's largest carrier.

The deal will need anti-trust approval, and integrating the workforces of fully unionized Northwest and Delta, where pilots are currently the only major unionized work group, will be tricky, analysts have said.

The agreement comes after several months of merger discussions between Delta and Northwest and at one time between Delta and United Airlines.

Analysts believe a Delta-Northwest combination will stand up better to regulatory scrutiny because the two carriers have less overlap, even though a Delta-United combination could create more scale and have greater synergies.

Years of mounting losses forced Delta and Northwest to file for bankruptcy protection in New York on Sept. 14, 2005. Both emerged from bankruptcy as leaner carriers last spring, after shedding billions in costs during their reorganizations.

While in bankruptcy, Delta fended off a hostile takeover bid by US Airways.

By Daily News

NEWS WIRE SERVICES