Delta Air Lines swallowed rival Northwest Airlines Inc. in a €2 billion merger that created the world's biggest airline and prompted new speculation about further industry consolidation.

The all-stock transaction, the first domestic airline combination in three years, closed after clearing its biggest and last regulatory hurdle earlier - US Justice Department antitrust review.

"The airline industry faces a very difficult economic environment around the world and this merger gives Delta increased flexibility to adapt to the economic challenges ahead," said Richard Anderson, the Delta chief executive officer who will head the combined entity.

The new, larger Delta will be an international powerhouse with unparalleled scheduling and pricing strength with service to 375 cities worldwide, experts said. The company estimates a combined €1.5 billion in cost savings and revenue enhancements annually.

An ambitious plan is to link the long-established strength of Northwest in Asia with Delta's expanding overseas network, and leverage benefits from the transatlantic SkyTeam alliance that includes AirFrance/KLM.

"There are global corporations but no global airlines. The race to become the first truly global airline has an incredible reward to it," said consultant Darryl Jenkins. "The revenue potential is something that we have not seen yet. That's the synergy that will make this very lucrative."

Mr Jenkins and other experts said the deal's potential may reignite merger fever, which burned this year until fuel prices started their dramatic rise this summer to record heights and prompted sharp airline cost cutting.