Delta Airlines has announced plans to join Continental Airlines' and Northwest Airlines' code-sharing agreement, which would enable the airlines to link into each others' networks and allow passengers to use frequent flyer miles on all routes.

However, the deal between the third, fourth and fifth largest US carriers, representing about 35 per cent of the US domestic market, could spark competition concerns. The airlines said they hoped the Department of Transport (DOT)review would be completed by November 1st, paving the way for the code share to kick off next spring.

The move comes in response to both a rival code-share agreement, announced in July by United Airlines and US Airways, and to harsh conditions in the sector. The DOT has extended its review of US Airways' and United's application by 30 days. The tripartite plan could accelerate international alliances, with the code-share extending to overseas routes.

Continental has the option to join the SkyTeam alliance, headed by Delta, which includes airlines such as Alitalia and Air France.

KLM, the Dutch flag carrier and Northwest's European partner, yesterday said it "expects that Europe will, in due course, also see three major airline alliances emerging and intends to play a significant role in one of these alliances together with its existing partners".

KLM said the US agreement would put its long-running informal talks with Air France on a new footing, possibly to the exclusion of British Airways. KLM said the link-up announced by Northwest and Continental, its US allies, and Delta, Air France's US partner, offered a "clear perspective" on the development of its own transatlantic routes.

Northwest and Continental have had a code-sharing deal since 2000, which Continental has said would deliver benefits this year of about $200 million (€205.7 million).