Delta Air Lines and Northwest Airlines could roll out their long-delayed merger as early as next week if the Atlanta carrier works out a related agreement with its pilots union, according to one person familiar with the talks.

However, the situation appeared to be fluid. Some people suggested Delta and Northwest could go ahead with earlier merger plans whether they reach an agreement with the pilots or not.

The carriers have been trying to revive their merger, which seemed close to an announcement in February until a feud between the carriers' pilots unions stalled the pact.

They want to do a deal quickly because they feel increasing pressure from high fuel costs and growing signs of a recession. Three smaller airlines have filed for bankruptcy and shut down in recent weeks. As if to underline the bleak outlook, the spot price of jet fuel shot to another record Wednesday, rising 13 cents per gallon to $3.43. Each penny-per-gallon rise boosts Delta's annual fuel bill by roughly $25 million.

Executives at Delta and Northwest also hope to get a deal done soon because they believe it will have a better chance passing regulators' scrutiny this year, before a Democratic administration possibly takes office, people familiar with the talks said.

To get around an impasse that developed, Delta and its pilots are trying to work out a side deal that would allow the merger to move forward while shelving an unfinished pact on how to blend the Delta and Northwest pilots' seniority lists.

Delta's pilots want to work out a separate agreement with the Atlanta carrier to push the merger forward in hopes of receiving some incentives, said a senior Delta pilot who requested anonymity because he is not authorized to discuss negotiations.

The Delta pilots are being offered pay raises, equity stakes and a seat of the board of the merged carrier to agree to labor contract modifications to give the airlines more flexibility, people familiar with the talks said. Two people said the carriers hope to announce a merger agreement as early as next week.

Such an agreement could also give Delta CEO Richard Anderson a face-saving way to proceed with the deal after making a commitment in a memorandum to employees to not do any transaction unless it preserves workers' seniority. Anderson's commitment didn't extend to Northwest's pilots.

The Wall Street Journal said Wednesday that Delta and the pilots hope to reach a decision by the end of this week.

Delta's directors met last week after Northwest broached the idea of going forward without a side deal between the two carriers' pilots unions on how to integrate their work groups. By getting their pilots to agree ahead of time on how to merge seniority lists, Delta and Northwest had hoped to reduce potential employee and political opposition and speed up the process of combining the two airlines.

The combination of Delta and Northwest, the nation's third-largest and fifth-largest carriers, respectively, would create the world's largest airline company, with routes stretching from Asia to Africa. Air France-KLM, which is an alliance partner with both Delta and Northwest, has said it will invest $750 million in a merger of the two airlines.

It was unclear Wednesday whether Air France-KLM is still expected to be part of the agreement, or whether the size of its potential investment has shrunk along with Delta and Northwest's market values. Delta and Northwest's share prices have dropped this year by 40 percent and 33 percent, respectively.

Another senior Delta pilot, who also asked not to be identified, said the prospect of Delta pilots negotiating without entanglement from their Northwest counterparts makes sense.

"The contracts are so different. It would be hard to merge two completely different contracts," the pilot said.

Separately, the U.S. Department of Transportation said Northwest and Delta should be allowed to share routes and revenue on flights across the Atlantic. The airlines have long been seeking permission to coordinate schedules and share money from such flights. Now the government has tentatively decided to grant that immunity to the two U.S. carriers, as well as to Air France-KLM, Alitalia and Czech Airlines.

Transportation officials say it would basically allow the airlines to act as a single carrier for service between Europe and the United States. Northwest already has such an alliance with KLM. All the carriers will still be subject to antitrust laws for all non-trans-Atlantic flights.

-- Staff writer Jim Tharpe and The Associated Press contributed to this article.