While Delta Air Lines and Northwest Airlines trumpet the advantages of a combined company, the stock for both has taken a nosedive this week, casting doubt on the benefits of a deal that would create the world's largest airline.

Delta stock closed Wednesday at $8.55, down 18 percent in the three days since the deal was announced. Northwest stock has dropped 15 percent to $9.49.

Industry experts say the Delta-Northwest deal faces major challenges:

• Rising fuel prices and price-sensitive customers make it difficult for any airline, no matter how big, to turn a profit.

• Combining a pair of large airlines could be lengthy and costly, wiping out any projected savings.

• Finding ways to cut costs will be tough because Northwest and Delta emerged last year from bankruptcy protection, a process that was supposed to slash costs for both companies.

The proposed merger will not be easy to work out, said George Godlin, vice president of the corporate finance group for Moody's Investor Services, a New York-based credit rating firm.

"These airlines have large, complex route networks," Godlin said. "They have very large, unionized work forces that have different cultures, and they've got very large, aging aircraft fleets. ... All of these things increase the complexity of combining two airlines."

This week, Moody's put the debt ratings of Delta and Northwest on review for possible downgrade. Both already have speculative grade ratings.

A combined Delta-Northwest would create an airline with far-flung operations able to serve more of the flying needs of customers, Godlin said. It could take many U.S. customers almost anywhere they wanted to go. But it's hard to understand how the merger would deliver significant operational savings, Godlin said.

Delta and Northwest executives have said the deal will provide $1 billion a year in "revenue and cost synergies" by 2012.

"I can see maybe $100 million as they eliminate some routes to some small airports in the Midwest," Godlin said. "But overall, $1 billion each year takes a big, concerted effort."

Analysts also point out that other airlines are unlikely to sit still. UAL Corp., which operates United Airlines, and Continental Airlines Inc. are reportedly talking about their own deal.

If other airlines merge, some of the benefits of a Delta-Northwest marriage could be lost, J.P. Morgan analyst Jamie Baker said in an investor note issued this week.

Delta-Northwest might bring in additional revenue initially by capturing more market share, but other airlines will fight to win back customers, the note said.

"[O]ne airline's revenue synergy is another airline's lost share, likely to be competed away over time,"Baker wrote. "Should [United and Continental] merge, Delta's synergy would likely move lower, in our view."

In a meeting this week with The Atlanta Journal-Constitution, Delta executives said they were not concerned about the stock prices. Record prices for jet fuel and speculators bailing on the stock after the merger was announced contributed to the declines, they said.

"The price of fuel set an awful backdrop to announce a merger, " Delta President and Chief Financial Officer Ed Bastian said in the meeting.