will form a strategic alliance with No. 3 US carrier Delta Air Lines, marrying the potential of two major transatlantic traffic hubs.

The deal followed an announcement yesterday that American Airlines had formed a European marketing alliance with Swissair and Belgium's Sabena World Airlines.

The Air France-Delta alliance, which should be operational by year-end and will be exclusive for 10 years, has lagged behind many tie-ups in the fiercely competitive aviation sector.

It will give both carriers access to each other's chief sources of passengers, and Air France Chairman Jean-Cyril Spinetta told a news conference the link is the first step toward folding in other partners to build a global network.

A Delta spokesman said Bermuda passengers would benefit from the alliance, with ease of transfer and booking through major US gateways, and through another airlink to Europe.

International links boost airline revenues by letting partners reach more cities and put passengers on each other's planes without buying new aircraft.

Delta's Atlanta hub is the world's largest while Air France, still majority-owned by the state after about 20 percent of its stock was floated in February, has in Charles de Gaulle airport the strongest growth potential.

Charles de Gaulle, the 10th busiest airport in the world, is used by about 35 million passengers a year.

"Air France, a European major, is allying with the top American major in terms of passengers carried,'' Air France Chairman Jean-Cyril Spinetta said in a statement.

Delta flies to more European cities than any US airline, but its international ties have faltered as rivals like United Airlines and American Airlines gained ground.