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The aviation industry has experienced high turbulence due to the unprecedented rise in world oil prices, intense competition for major players from low cost carriers and the prolonged recession in the US economy. In this context, the merger of Delta and Northwest, two of the oldest and largest airlines in the US, assumes great significance. The USD17.7 billion merger will make new Delta the biggest airline in the world. Although the two companies had emerged out of bankruptcy protection at the time of merger, many vital issues remained unresolved, including the dispute with the pilots' union of Northwest Airlines regarding the terms of merger. The case gives an insight into the unique challenges faced by Delta and Northwest and expounds on how the merger will help them tide over difficulties and emerge as a stronger and better airline. It also analyses the role of consolidation in the aviation industry to minimise losses and achieve economies of scale.