In a move designed to rescue one of America's most beleaguered airlines from its second trip to bankruptcy court, US Airways and America West Airlines agreed to merge Thursday in a deal to create the nation's sixth-largest airline in terms of traffic.

The merger will pump more than $1.5 billion of fresh capital into the new airline, and executives from both companies promised Thursday to slash $600 million in costs by combining routes, cutting redundant operations and eliminating aircraft.

If they are successful--a big if, analysts say--the deal will create a new low-cost airline with $10 billion in revenue and national scope.

Click here for full story