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Delta Air Lines Inc. and Northwest Airlines Corp. agreed to a merger today, creating the world's largest airline and triggering what is expected to be a long-awaited industry consolidation.

The oft-delayed pact came amid one of industry's most-tumultuous periods as three airlines collapsed in one week and American Airlines, the current largest carrier in the world, canceled thousands of flights because of missed aircraft inspections.

Delta said the combined airline would have an enterprise value of $17.7 billion.

The latest industry turmoil could boost prospects for the merger's approval as the airline industry faces record fuel prices and slowing demand for air travel amid fears of a recession. Up next, analysts said, is a possible combination between United Airlines parent UAL Corp. and Continental Airlines Inc..

For the flying public, the Delta-Northwest combination could result in higher fares in some markets, but widespread hikes are likely to be muted because the two airlines have few routes that overlap.

The merger is expected to have a modest impact for Southern California travelers. The two carriers account for about 11% of the market share at Los Angeles International Airport. The combined carrier would be fourth-largest operating at LAX behind American, United Airlines and Southwest Airlines Co..

Neither Delta nor Northwest has extensive service to other Southern California airports.

But the deal, which would require approval from the U.S. Justice Department, would be huge elsewhere. It would create a new and expanded Delta with a fleet of 800 planes and 75,000 employees. It would fly more than 105 million passengers annually to more than 390 cities worldwide, and would the largest airline in terms of total passengers.

In a statement, the carriers said the new airline would retain the Delta name and have its headquarters in Atlanta, where Delta currently has its largest airport hub. In hopes of winning political support in Minneapolis, Northwest's home base, the combined airline would keep a major presence there, including maintaining Minneapolis-St. Paul International Airport as a major hub.

"Together, we are creating America's leading airline, an airline that is financially secure, able to invest in our employees and customers, and built to thrive in an increasingly competitive marketplace," said Delta Chief Executive Richard Anderson, who will head the combined airline. "Delta and Northwest are a perfect fit."

But the deal faces significant hurdles from consumer organizations, which are fearful of rising ticket prices, small communities worried about losing air service and several powerful members of Congress. Rep. Jim Oberstar (D-Minn.), the chairman of the House Committee on Transportation and Infrastructure, has already vowed to try to block the merger.

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