MINNEAPOLIS — Negotiators for Northwest Airlines and Delta Air Lines are working “diligently” to resolve remaining issues in the way of a merger deal that would create the world’s largest airline, a person familiar with the talks said Wednesday.

A merger deal could be announced as early as next week, but the parties have not set a hard deadline for reaching agreement.

Northwest CEO Doug Steenland gave the Northwest board of directors an update on the merger talks Friday, and the board provided direction for further discussions with Delta. Leaders of both airlines are motivated to conclude their talks soon, because they want the U.S. Department of Justice to have enough time to complete its antitrust review before the Bush administration ends.

Delta CEO Richard Anderson, who served as Northwest’s top executive from 2001 to 2004, would be expected to lead the combined carrier.

Steenland’s future role is unclear. The composition of senior management for the merged airline remains an “open issue,” a person with knowledge of the talks said Wednesday.

That person said that other issues must still be addressed, but added “they are being approached constructively from both sides.”

Northwest and Delta filed for bankruptcy on the same day in September 2005 and exited court protection last spring. While both shed debt and reduced their operating costs during their Chapter 11 cases, both have been hit hard by skyrocketing oil prices.

In Delta’s case, some of the cost-cutting progress that it made in bankruptcy was obliterated by a $1.36 billion fuel bill in the fourth quarter of last year — a 28 percent increase.

Northwest’s quarterly fuel bill jumped 16 percent to $937 million.

Delta’s stock traded at $23.25 per share around the time it left bankruptcy, but shares plummeted 51 percent within about eight months. Northwest’s post-bankruptcy stock was at its peak of $26.50 June 1. It fell 60 percent to $10.70 last month but since has recovered to $18.47 because of merger speculation and a small drop in oil prices.

Delta stock closed Wednesday at $17.95 a share.

“It has become very clear that airline stocks are totally a function of oil prices,” said Julius Maldutis, a former Wall Street airline analyst.

In addition to responding to impatient shareholders, both airlines see the prospect of a merger as providing benefits to their employees and customers. For example, Delta’s leadership is insistent that any merger would secure Delta’s financial future over the long haul, people familiar with Delta’s thinking said Tuesday.

A combination with Northwest brings many benefits, including a complementary route structure in the United States, a major presence in Asia and membership in the same international alliance, SkyTeam.

But sources familiar with the talks said that a key priority for Delta is merging with a partner that can strengthen its financial position, including a favorable cost structure.

Northwest fits those criteria.

Northwest reduced its annual operating costs by $2.4 billion by the conclusion of its bankruptcy, with the biggest share coming from its employees, who took $1.4 billion in cuts.

By the second quarter of last year, Northwest had the lowest unit cost – excluding fuel – among the six big network airlines in the United States.

Calyon analyst Ray Neidl said this week that he still expects Delta and Northwest to kick off a wave of industry consolidation. Neidl said in a report that a merged carrier “would be in a strengthened position and costs would ultimately be saved through eliminating overhead and having greater purchasing power with suppliers.”