Please turn on JavaScript. Media requires JavaScript to play.
Rival US companies Delta Air Lines and Northwest Airlines have agreed to merge in a $5bn (£2.5bn) deal that will create the world's biggest carrier.
The new airline, to be called Delta, will have annual revenue of more than $35bn and employ about 75,000 staff.
Analysts say the deal could prompt similar moves by other US airlines struggling with rising oil prices.
But the deal, sealed a year after both carriers exited 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 to offset rising fuel-prices.
"Merging Delta and Northwest is the most effective way to offset higher fuel prices and improve efficiencies, increase international presence and fund long-term investment in the business," said Delta chief executive Richard Anderson, who is also to lead the new airline.
However, shares in both companies had fallen by market close on Tuesday. Northwest shares fell 94 cents, or 8.4%, to $10.28, while Delta lost $1.32, or 12.6%, to $9.16.
'Pro-merger'
The merger agreed on Monday night will see Northwest shareholders receiving 1.25 Delta shares for each of their Northwest shares.
The combined company 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.
The deal still requires approval from competition authorities but it is not expected to face hurdles on that front.
"We will look at the competitive effects of the transaction and how it would affect consumers," Justice Department spokeswoman Gina Talamona said on Tuesday afternoon.
"This administration has taken a very pro-merger stance," said Diana Moss, an economist at the American Antitrust Institute.
Logan International Airport

Rival United States airlines Delta Air Lines and Northwest Airlines announced today that they have agreed to merge. The new airline, which will use the Delta name, will be the largest commercial airline in the world.

Technically, Delta will be buying Northwest in a roughly US$3 billion deal. Northwest shareholders will receive 1.25 shares of Delta for each share of Northwest. Based on Monday's closing prices on the New York Stock Exhange this represents a 17% premium for Northwest shareholders.

Richard Anderson, the Delta chief executive officer who will also head the new company, said: "We said we would only enter into a consolidation transaction if it was right for all of our constituencies; Delta and Northwest are a perfect fit. Today, we’re announcing a transaction that is about addition, not subtraction, and combines end-to-end networks that open a world of opportunities for our customers and employees. We believe by partnering with our employees, including providing equity to U.S.-based employees of Delta and Northwest, this combination is off to the right start."

The combined company would have $35 billion in annual revenue and approximately 75,000 employees. The deal does have to receive regulatory approval. "We will look at the competitive effects of the transaction and how it would affect consumers," said Gina Talanoma, a spokesperson for the United States Department of Justice.

Airline industry consultant Robert Mann told Reuters, "It's a very optimistic view on an industry that's been very dismal for the last couple of weeks."