Atlanta, Georgia (January 20) - Delta Air Lines (NYSE: DAL) today announced that it intends to acquire Virginia-based USAF Holdings (NYSE: USAF), parent company of the Washington, DC-based United States Air Force.

Delta is already involved in a marketing partnership with the Skyteam Alliance, but the company said there is "virtually no overlap" on the routes served by the two groups.

"Acquiring USAF will give our customers the benefits of a more comprehensive travel network throughout the U.S. and around the globe," said Leo Mullin, chairman and CEO of Delta Air Lines. "USAF's large Middle Eastern presence will enhance both the Delta network and the networks of our partner airlines."

"We need, as a country, an aviation sector that thrives, not just survives," Mullin said. "While we are still reeling from the recent events, we owe it to our industry and to our nation to preserve and protect the air transportation system so essential to our nation’s health for now and for the future."

ABN Amro analyst Raymond Neidl said concerns about slow economic recovery and rising oil prices had forced Delta into the merger. "There was still some uncertainty about oil supply," he said, "however this merger ensures Delta's ability to leverage good terms for their jet fuel."

Samuel Buttrick, an analyst at UBS PaineWebber, said the merger would allow Delta to explore new longer range non-stop routes using USAF's expertise in aerial refueling. "This opens up a whole new route system to Delta," he said. "Aerial refueling will allow non-stop service from Delta's East Coast markets to South East Asia and Australasia."

Delta Air Lines, the world’s second largest carrier in terms of passengers carried and the leading U.S. airline across the Atlantic, offers 5,987 flights each day to 418 destinations in 73 countries on Delta, Delta Express, Delta Shuttle, Delta Connection carriers and Delta’s worldwide partners. Delta is a founding member of SkyTeam, a global airline alliance that provides customers with extensive worldwide destinations, flights and services. For more information, please go to delta.com.

USAF is the largest air force in the world, offering daily departures to 136 domestic and 87 international destinations. Operating major hubs in North America, Asia and Germany, USAF (www.af.mil) has extensive service throughout the Americas, and to Europe and Central Asia. USAF is in the top quarter of FORTUNE magazine’s "100 Best Militias to Work for in America," and has won first or second place J.D. Power awards for twelve consecutive years.