The U.S. airline industry has experienced a tumultuous flight in recent years, with 150,000 jobs and more than $29 billion lost since 2001.  And now, with fuel prices rapidly on the rise, many carriers are further struggling to keep up with costs and appease disgruntled passengers. While the landscape for doing business continues to change beneath their wings, airline executives are naturally seeking a more stable platform for moving forward.

Mergers and acquisitions have been a means for pursuing operational efficiencies and embracing the axiom, “if you can’t beat ‘em, join ‘em.” Some argue that such consolidation eliminates choices for consumers, and can be worrisome for employees, because business efficiencies are often achieved by eliminating redundant labor costs. However, mergers must be evaluated on a case-by-case basis.

The proposed merger of Delta Air Lines and Northwest Airlines is a case in point. The proposed merger offers a compelling new model of partnering that will enable the combined airline to pursue new revenue sources, expand their operations and allow it to better compete in the global marketplace.

The appeal of the Delta-Northwest deal, however, begins domestically. The two airlines chose each other precisely because they were not strong rivals. In fact, their route networks have very little overlap. Out of more than one thousand non-stop city routes, only twelve are served by both airlines and only two percent of Delta’s seats are in direct competition with Northwest. And with the market share from discount carriers climbing from 24 to 34 percent of industry capacity between 2000 and 2007, the new airline will continue to face stiff competition in pricing.

In fact, if the deal goes through, Delta will heighten expectations among travelers and force the competition to improve their services. Capital from the deal may be used to reinvest in the airline, delivering upgrades in cabin interiors and improved technology in baggage handling. Customers will also enjoy more flexibility and better scheduling options, and the new Delta will serve 140 small communities – more than any other airline.

Delta and Northwest, however, are unlikely to crush competition in the crowded domestic marketplace. Rather, the two intend to direct their attention overseas, where European carriers are aggressively expanding and leaving U.S. carriers far behind. The two airlines know that business travelers and international travelers flying very long distances contribute more revenue relative to cost than other travelers.  These are the customers that will give the airline industry the revenue it needs to pay the high jet fuel bills.

Both companies have watched Air France/KLM become the world’s largest airline in terms of revenue, while new airlines such as The Emirates continue to expand their service to international travelers. From a national perspective, we need to ensure that an American company can effectively compete in this global market and serve high-revenue travelers.

In short, this merger means more competition through stronger domestic networks with more destinations around the globe. That is why the Delta-Northwest merger is bigger than either company: a brand new business model for the industry, much the same way Southwest has done for discount service. This partnership will hopefully ease boom-and-bust cycles and provide stability to a struggling industry.  But most importantly, it may help a homegrown company stay afloat, while keeping jobs and a major domestic industry more secure.