Delta becomes world's biggest airline as Lufthansa takes BMI

LONDON - Delta is buying fellow US airline Northwest in a $2.8bn deal to create the world's biggest airline, while Lufthansa takes control of UK airline BMI.

Delta will gradually phase out the Northwest brand over the next two years. The combination of the two airlines will serve more than 375 worldwide cities, more than any other airline, and employ around 75,000 people worldwide.

Richard Anderson, chief executive of Delta said: "With much of the work to bring our airlines together well under way, the new Delta will be at the front of the pack in achieving the benefits of consolidation and is well positioned to navigate the tough waters ahead in a difficult economy."

In the UK, BMI's chairman Sir Michael Bishop has opted to sell his 50% stake to Lufthansa for a reported £318m. The German airline already owned a stake of 30% minus one share while Scandinavian Airlines (SAS) owns 20%.

It is uncertain how the deal will affect the BMI brand in the long term.

A spokesman for BMI said: "It's too early to say. We're at the beginning of a process that will complete by January 12. We don't have a comment."

Bishop was able to force Lufthansa to buy his stake under the terms of an agreement the two sides signed in 1999.

The purchase, to be completed by January 16, will give Lufthansa more take-off and landing slots at Heathrow than any other airline apart from British Airways.

Virgin Atlantic has responded to the development by offering to combine its own operations with BMI.

BA is currently in merger talks with Spanish airline Iberia.