Airlines need to make the most of limited slots at the largest airports

Under the deal, the two airlines will share revenues from flights between Europe and the US, expected to total $8bn (5.6bn euros) a year from 2010.

Closer co-operation would allow the carriers to launch new routes and run services more frequently, the duo said.

Airlines want to exploit the opening-up of US-European travel next year.

'Open skies'

From March 2008, airlines will legally be able to fly from anywhere in the US to anywhere in Europe under the so-called "Open Skies" agreement.

For many years, airlines on both sides of the Atlantic have railed against restrictions on offering transatlantic services from airports such as Heathrow and JFK in New York.

These lucrative slots have been dominated by BA, Virgin Atlantic, United Airlines and American Airlines.

The agreement marks an unprecedented move to offer our customers a greater choice of routes and schedules Air France-KLM, Delta Air Lines statement

Air France-KLM and Delta have co-operated on logistical matters since the late 1990s, but this agreement is more far-reaching.

From April, the two airlines will sell tickets for each other's flights between Heathrow and the US, as well as between other hub airports in France and the US.

New flights to be introduced as part of the alliance include Delta services between Heathrow and New York and between Paris and Salt Lake City.

'Unprecedented move'

The deal will be expanded in 2010 to include all flights between Europe and the US.

"The agreement marks an unprecedented move to offer our customers a greater choice of routes and schedules," the two firms said in a joint statement.

"Together, we will be able to provide our customers with an outstanding transatlantic service, both in terms of routes, capacity, frequencies and quality of service."

The two airlines hope to extend the alliance to include US carrier Northwest Airlines.

Delta emerged from bankruptcy protection earlier this year and recently reported strong growth in quarterly profits.

Air France and KLM merged three years ago, but still operate stand-alone services, largely to keep hold of lucrative landing slots at crowded airports such as Heathrow.